Results 1 to 2 of 2

Thread: Building own House - Construction Company

  1. #1
    Full Member
    Join Date
    Mar 2014
    Location
    Cape town
    Posts
    47
    Thanks
    16
    Thanked 1 Time in 1 Post

    Building own House - Construction Company

    Morning all,

    I have a quick question as i'm not to sure about this...

    We are a construction company that builds houses, so all cost are on the COS and all revenues as Income (income statement).

    We decided to build our "own home" as we will rent that house out going forward...we will not sell this!

    My question is, how to I record these materials that goes into this project. I was thinking of allocating everything to a "Work in progress account" and when we are done journal this out to buildings @ cost...

    Is this the right way of doing it or am I missing something? We obviously have appliances etc going into this house / project aswell.

  2. #2
    Gold Member
    Join Date
    Feb 2016
    Location
    Johannesburg
    Posts
    713
    Thanks
    74
    Thanked 199 Times in 178 Posts
    That is absolutely correct, as regards the building. If it is going to be rented out, it is classed as Investment Property.

    The appliances should probably be capitalised as appliances and depreciated, otherwise (if capitalised along with the property) you will have to consider annual impairment write offs.

  3. Thank given for this post:

    flaker (05-Oct-17), mango (10-Oct-17)

Similar Threads

  1. Replies: 3
    Last Post: 24-Feb-17, 10:15 AM
  2. Brickwork walls construction
    By daveob in forum General Chat Forum
    Replies: 3
    Last Post: 24-Apr-12, 05:36 PM
  3. Replies: 3
    Last Post: 20-Feb-10, 08:04 AM
  4. Replies: 3
    Last Post: 22-Sep-09, 02:07 PM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •