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Explanation: Capital Work in Progress refers to the costs of long-term projects that are still in the construction or development phase. It represents the value of assets that are not yet completed and ready for their intended use. CWIP is a balance sheet item and includes expenses like construction costs, equipment purchases, and other expenditures related to ongoing projects.
In industries like real estate, infrastructure, or manufacturing, companies often have significant capital expenditures for projects that take time to complete. Capital Work in Progress helps account for the costs incurred during the construction or development phase.
Example: As of FY23, TCS had CWIP of 1,234 crore. This indicates that TCS had incurred 1,234 crore in costs for long-term projects that were still underway and not yet completed during that fiscal year. These projects could include the construction of new facilities, the development of software platforms, or the acquisition of capital equipment. CWIP reflects the investments made by TCS in expanding its operations and enhancing its capabilities, which are expected to contribute to future revenue generation and growth once these projects are completed.
You can view the Capital Work in Progress for any company on Radar under Non-Current Assets in Balance Sheet section.