KRISHAN CHANDRA PANIGRAHI (Working In Finance Dept.) (120 Points)
27 December 2012Hi All,
can anyone Guide me whether WIP will be included in project revenue as per AS-7 ???
Thanks in advance.
regards,
Krishna.
CMA RAVI
(ASSISTANT MANGER - FINANCE)
(478 Points)
Replied 27 December 2012
| Originally posted by : krishna | ||
 |
Hi All, can anyone Guide me whether WIP will be included in project revenue as per AS-7 ??? Thanks in advance. regards, Krishna. |
 |
For your reference :
(a) By manufacturing units
Actual cost incurred for each contract is worked out
based on actual cost incurred upto the reporting
date in respect of items manufactured and
physically despatched to the project site (emphasis
supplied by the querist). Raw materials, stores and
spares procured by the units and work in progress
(WIP), which are not a despatchable unit are not
considered as actual cost incurred for the purpose
of working out the percentage of completion.
Similarly, finished goods, which are lying at unit and
not physically despatched from manufacturing unit
to project site are not considered for the purpose
of calculating actual cost incurred for working out
percentage of completion for revenue recognition.
The costs incurred on above are recognised as
inventory in the accounts.
praveen
(Chartered Accountant)
(6971 Points)
Replied 27 December 2012
No WIP will not be considered.
However, the increase in WIP that is Closing WIP - Opening WIP will have effect on the revenue
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