Accounting Treatment for CWIP (AUC)

Question

Please Explaing me the Accounting Treatment for Capital Work In Progress.
what are the accounts we need to create for CWIP ( AUC ), & Whats the treatment in SAP.
As per my Knowledge when an asset under con, following entries will be effected.
1. 01.04.06 to 31.03.2007. ( Asset Under Construction ).
    CWIP Exp (P&M) A/c Dr  5000
        To  Bank A/c                       5000
(For Exp incurred for CPWIP)
2. Capitlized on 01.04.2007.
      Plant & Machinery A/c     5000
           To CWIP Exp (P&M)             5000
( being Asset has been capitalized on 01.04.2007)
please guide me whether the above details correct or not.
if wrong please send me the procedure for CWIP.

Answer 1

Your entries are correct. In SAP you can settle AUC in two ways
Ist  Method
1. Create AUC under 4000 asset class
2. Make postings to AUC through f-90
3. Make distribution rule using T Code AIAB
4. Settle the AUC using TCode AIBU
In step (3) you can distribute the amount spent on AUC to two or more assets otherwise you can give only one asset and then settle the AUC through AIBU.
2nd Method
1. Create an investment order (KO01)
2. System automatically creates AUC under asset class 4001
3. Enter distribution rule in the same screen ( like in the (3) above) or just give a cost center or an asset.
4. Post payments through F-90 and give the order number in that screen
5. Then settle the AUC using TCode KO88
Radha