Valuation Of WIP Stock

Hi 

What is the criteria to value the Work In progress Stock. Because practically i am facing alot of difficulty for valuation Of WIP.

Also in cost sheet we add op. stock of WIP and deduct cl. stock of WIP . But at what value we should take WIP stock in Cost Sheet.

Pls clarify

Thanks

Replies (3)

As per AS 2 Inventory should be valued at lower of cost or net realisable value. Now as per AS 2 Inventories include WIP. cost of WIP u know and NRV = saleable value - estimated amount of expenses that will be required for completion of product....

You have to arrive at the Cost of WIP by taking in the Direct Expenses and your production overhead. While apportioning your overheads to WIP, you will need to calculate equivalent units to arrive at a common unit measure.

What industry may i know?

Friends ..kindly let me know the detailed procedure of valuation of WIP under IFRS and also highlight how it is diferent from valuation done in AS?

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