The basic meaning of Capital Work-in-Progress is assets under installation.

This could either be plant or machinery under construction, or that construction project for establishment of a new factory is under progress. If you want to verify this account in your client's books, use the following checklist.

• Ensure that the capital project is authorised by the Board. See the relevant Board Minutes for the purpose.
• Obtain the break up in details of the amount shown in the Balance Sheet under this head.
• Check purchase cost of plant machinery or other assets with reference to the contract with, and amount paid to the suppliers.
• Examine the allocation of common costs to the Capital Work-in-Progress in case such items have been constructed internally.
• Ensure that the assets already put to commercial use are not included under Capital Work-in-Progress.
• Verify that only expenses incurred up to pre commissioning stage are capitalised under this head.
• Obtain the certificate of the engineering department to ascertain the quantum of the Capital Work-in-Progress, and whether the value is correctly represented in the Balance Sheet, and its transfer to Fixed Assets on completion of the project or installation of the plant.
• See that Capital Work-in-Progress is properly disclosed in the Balance Sheet under the head Fixed Assets as per the presentation and disclosure requirements of Schedule III to the Companies Act, 2013.