Capital Work in Progress
Expenditure on assets still under construction, held on the balance sheet until the asset is ready for use.
Formula
Test: the asset is not yet ready for its intended use, so no depreciation is charged and costs accumulate on this line
Unit
₹ crore
In depth
Capital work in progress attracts no depreciation and produces no revenue, so a large and growing balance flatters current profitability while the eventual charge waits offstage. Interest incurred on borrowings for the project is also capitalised into this line rather than expensed, which understates reported interest cost. A balance that sits unchanged for several years is a serious warning: either the project has stalled or costs are being parked here to avoid the profit and loss statement. The ageing disclosure required in Indian filings is where that pattern becomes visible.
Worked example
Capital work in progress of ₹350 crore sits flat for four years. Once commissioned at a twenty-year life, it will add roughly 350 / 20 = ₹17.5 crore of annual depreciation plus previously capitalised interest — a profit reduction already committed.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Capital Work in Progress” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.