You Decide: Should the costs associated with an uncompleted consulting project be classified as a work-in-process asset on the balance sheet, or should the cost be expensed on the income statement as a part of doing business?

Your marketing company has been working on a consulting project for a client. Your team has worked on the project for two months, and it is now year-end. The project will be completed by February of the next year, and the client has not yet been billed. For the financial statements, how should the project be classified?