house flipping

In a house flipping scenario, I understand that the purchase of the property and the improvements go into cost of goods sold (COGS) only when the property is sold. However, if a property isn’t sold within the current year, how should the purchase and improvements be accounted for on the financial statements? Do these costs remain as assets on the balance sheet until the sale occurs, or is there a different accounting treatment for them in the meantime? I’d appreciate any insights or best practices. Thanks!

"Specific identification" is what you're seeking. Create an asset account for each property where all costs are posted until sold. You can have sub-accounts for each property if you have a need to track different categories. The treatment should be the same regardless of sale date--accrue as asset, move to COGS once sold.

Thank you