difference between investment project & cost projects

[Former Member]

Dear Experts,

What is diffreence between Investment project and Cost project?

Thanks in advance

Regards

M.N. Tiwari

Edited by: MeghnathTiwari on Oct 14, 2009 7:21 AM

[Former Member]

Hi,

There are mainly 2 kinds of projects 1. Customer project (i.e. what ever is produced or created that is sold to customer)

2. Non customer project a. investment b. cost project, which both the cost is beared.

Investment project is seen as investment and which will give returns in future.

E.g. Expansion of plant or building up new machinary set etc. hence after completation this will be settled as Asset. Then it's cost/value undergo depreciation cycle per year as per related accounting principles applied.

Cost project is settlement of cost to cost collectors. E.g. purchasing of services for betterment of business. in this the costs are settled to cost collectors only. e.g. paying charges to SAP implementation partners, Paying to Auditors etc.

Sameer Wad

[Former Member]

Hi

Investment projects generally leave an Asset like a building/ machinery etc and all the costs are capilized. An asset is created to which all the costs are transferred.

Whereas a Cost project is like an R&D project where costs are incurred for the project. These are generally passed as Overheads and no asset is created.

Venu

[Former Member]

Thanks Venu.

Can anyone suggest me one or more difference between these projects.