Capital project revrec

For build-to-hold projects that capitalise costs to a fixed asset rather than recognising revenue. Run the Capitalisation worksheet at period-end to move accumulated costs from the project's work-in-progress account onto the balance sheet.

When to use this

For build-to-hold projects where the completed asset is held on the balance sheet rather than sold to a customer — for example, internally funded property development, owner-occupier construction, or capital expenditure projects. These projects use the Capital billing type and never produce customer invoices, so they use Capitalisation in place of standard revenue recognition.

Prerequisites

• Project flagged with the Capital billing type
• Fixed Asset (or Asset Clearing) GL account in place — set either as the subsidiary default in the Configuration record or as a project-level override
• (If applicable) Development and Lot records configured for multi-lot capitalisation — see Custom records
• All vendor bills and project costs for the period have posted
• Permission to create and approve Capitalisation records

Walkthrough

1. Navigate to FullClarity → Project Financials → Capitalisation and click New.
2. Set the Date and Posting Period.
3. Pick the Subsidiary and (optionally) narrow by billing type.
4. Select the projects to include. The worksheet creates one Capitalisation Line per project — same structure as the Revenue Recognition worksheet, calculated values plus revised overrides.
5. Review and (if necessary) override the calculated capitalisation amount per project.
6. Submit the Capitalisation record. The status moves to Generating Journals and a background batch posts one Capitalisation transaction per line. Each transaction debits the fixed-asset / asset-clearing account and credits the project's expense accounts (split by cost category).
7. (For Capital Claims — where the project draws against a capital facility rather than capitalising direct cost) — open the project's Drawdown subtab and create a Capital Claim record directly. Capital Claims use a simpler record-edit flow than progress claims.

What success looks like

• Capitalisation record in Completed status with one line per included project.
• One Capitalisation custom transaction posted per project — debits the asset account, credits the expense accounts by cost category.
• The project's accumulated cost on its work-in-progress account is decremented by the capitalised amount.
• The fixed-asset (or asset-clearing) balance is incremented by the same amount.
• For multi-lot developments — each lot's share of the capitalised cost is visible on its lot record.

Gotchas

• Capital projects don't generate Revenue Recognition transactions. They capitalise instead. Don't run both flows on the same project — pick one based on the project's billing type.
• Capitalisation can run multiple times across a project's life. Typically at major milestones rather than monthly, but the system doesn't enforce a cadence — run it when finance wants to move cost off the WIP account.
• The deferred-expenses GL plug-in still applies. Vendor bills for a capital project route to a deferred expense account until covered by a Capitalisation. The capitalisation transaction clears the deferred balance.
• Project-level asset accounts override the subsidiary default. If a project's asset clearing account is set on the Job record, that takes precedence over the Configuration record's default.
• Capital Claims and Capitalisation are separate things. Capitalisation moves cost onto the balance sheet from WIP. Capital Claim is a claim against a capital funding facility (e.g. a developer drawing against equity). A project can use either or both.
• Same status lifecycle as revenue recognition — Pending → Generating Journals → Completed (or Completed With Errors). Recovery follows the same pattern.

Related

• Set up revrec rules
• Run a monthly batch
• Custom records