What are assets under construction (AuC)?

Where expenditure relates to a project, these development costs need to be transferred to capital work in progress monthly for financial reporting purposes. These costs can simply be accumulated on a balance sheet account by defining a balance sheet general ledger account as the cost receiver for periodic settlement. For a more granular analysis of significant capital work-in-process expenditure, temporary asset under construction (AuC) records can be created. These are a special class of assets within SAP that are not subject to depreciation. Where assets under construction are utilized, it is possible to report capital WIP for each asset under construction. On project completion, these costs are transferred from the interim AuC records to the final fixed asset master records.