ANS-0390 · ACCOUNTING & FINANCIAL CONFIGURATION
How to Manage Construction in Progress (CIP) Assets in NetSuite Without the Projects Module?
Learn the best practices for tracking and capitalizing Construction in Progress assets using standard NetSuite functionality when the Project module is not enabled.
Short answer
To manage CIP assets without the Project module, create dedicated CIP expense accounts for purchases and GL entries. Ensure all related transactions reference these accounts. Once all costs are recorded, create a journal entry to credit the CIP account and debit the Fixed Asset account. Propose this journal entry as an asset for depreciation.
Scenario
Organizations often need to track Construction in Progress (CIP) assets, which accumulate costs during their construction phase before being capitalized as fixed assets. This process can be challenging in NetSuite when the Project module is not implemented, requiring an alternative method to accurately record and transition these assets.
Solution
When the NetSuite Project module is not utilized, the following best practices can be applied for managing Construction in Progress (CIP) assets:
Create a specific CIP expense account for all CIP purchases/Bills and GL entries. It is recommended to create one distinct account for each CIP project.
Ensure all Purchases/Bills and GL entries reference the appropriate CIP account. This step is crucial for the accurate categorization of all related costs.
When all Bills have been entered, create a journal entry crediting the CIP account and debiting the Fixed Asset account for the grand total amount.
Propose the Journal entry as an Asset for the grand total amount.
Once the item is recognized as an asset, it can be depreciated according to its established schedule.
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