Construction Work in Progress is a long-term asset account in which the costs of  constructing long-term assets are recorded. The account Construction Work in Progress will have a debit balance and will be reported on the balance sheet as part of a company’s Property, Plant and Equipment.

The costs of a constructed asset are accumulated in the account Construction Work in Progress until the asset is placed into service. When the asset is completed and placed into service, the account Construction Work in Progress will be credited for the accumulated costs of the asset and  will be debited to the appropriate Property, Plant and Equipment account.

Depreciation begins after the asset has been placed into service.

Learn more about Depreciation.

About the Author: Harold Averkamp (CPA) has worked as an accountant, consultant, and university accounting instructor for more than 25 years.

He is the creator of the AccountingCoach Pro which has been praised for its ability to simplify accounting in a way that anybody can understand.

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