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WIP Costing.

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This query is : Resolved

Ramanathan (Querist)

23 July 2010 Hello Sir/Madam,
Can you Please explain me, Why are we Accounting for Work in Progress? What is the financial impact of it? how do you account for Work in Progress in Jobs and resources. If at all, is there a difference between Work in Process and Work in Progress?

In Accounting the WIP, What are the cost that you associate in calculating the the value of the WIP at the year end? Whether you take the cost value or Sales value or as a percentage of completion? If you apply as a percentage of completion, on what value you apply the percentage?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

23 July 2010 Work in progress necessary to account for arriving the correct recognation of expenses and related income, The expenses already incurred but not billed to the clinet need to show as work in progress because we already incurred the expenses, if the same work in progress is not recognaised the expenses and related income go to different period and real profit for the same cannot be found

As accouting aspects the work in progress need to value at cost only

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