In accounting for costs incurred on a major construction project in a capital projects fund, the construction outlays are reported as expenditures, not capital assets.

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In governmental accounting, when using a capital projects fund, costs incurred during a major construction project are reported as expenditures because the fund focuses on the financial resources used for the project, not on the capital asset being constructed. The capital asset itself is reported in the governmental activities at the government-wide level.

In Accounting for Costs Incurred on a Major Construction Project