Hello, we are building a new office building for our business, and need to set up a construction in progress account, for entering all costs for this, which will be transferred over to the ‘Buildings’ fixed asset account, once the building is completed and placed in service. What I am unsure of, is where this CIP account is placed on the chart of accounts. Would CIP be a subaccount of the Buildings fixed asset account, and be a fixed asset account also? Would this CIP account have any subaccounts?
I understand there would be no depreciation recorded until all is transferred over to buildings once completed.
Thank you in advance.
