Work in progress several types of products. Features of keeping records of work in progress

Accounting for work in progress (WIP) is an important aspect of any large enterprise. The correct assessment and reflection of WIP affects not only the calculation of the cost of production, but also the final financial statements.

WIP accounting

Rule of conduct accounting and reporting includes the following types of products as WIP:

• products that have not passed all the stages (stages) of the technological process;
• incomplete products;
• products that have not passed technical acceptance or testing;
• works not accepted by the customer.

To understand why the WIP estimate affects the cost calculation, you need to consider its formula:

Cost price \u003d WIP (beginning of the period) + Costs - WIP (end of the period)

When reflecting WIP in accounting, the following types of estimates are used:

• according to actual costs
• at actual or planned production cost,
• at the cost of raw materials used.

You should be aware that in serial production, you can use any of these options, and in a single one, only an estimate based on actual costs.

Organizations that provide comprehensive services or produce products in several stages, may recognize the completion of the sale by one of 2 methods:

• as a whole as a job (service);
• in separate steps.

If the accounting policy of such an organization suggests the second option, then account 46 “Completed stages for work in progress” is applied and the following entries are made:

• Dt 46 Kt 90 - the cost of the completed stages is reflected in the accounting;
• Dt 62 Kt 46 - the customer paid for the work (services).

WIP balances at the end of the period in quantitative terms can be established using an inventory or documentary method. Then, in the accounting department, their cost expression is calculated.

As a result, WIP is the balance of accounts 20 “Main production”, 44 “Sales expenses”, as well as 23 “Auxiliary production” and 29 “Service production and farms”.

WIP tax accounting

Article 318 of the Tax Code of the Russian Federation states that the organization independently establishes the procedure for distributing direct costs for finished products (FP) and WIP. It is important to take into account that the costs must correspond to the products produced. The taxpayer must reflect this procedure for assessing WIP in accounting policy and apply for two tax periods.

In general, the calculation of WIP takes place in 4 stages:

1. calculation of the total amount of expenses;
2. calculation of WIP balances at the end of the period;
3. calculation of GP balances at the end of the period;
4. calculation of the cost of the balance of shipped, but not paid for products.

WIP inventory is carried out in accordance with by order of the Ministry of Finance of the Russian Federation of June 13, 1995 No. 49, which contains guidelines. According to this order, a mandatory inventory may be carried out (when changing the MOT, reorganization, theft or damage, reporting), as well as other cases for conducting an inventory may be established by the accounting policy.

First of all, the leader must draw up an order that includes the following items:

• a description of the property being inspected,
• reasons for the event, start and end date,
• committee members,
• terms of submission of documents to the accounting department.

Checking WIP is carried out by weighing, measuring, counting. At the same time, materials and semi-finished products that have not undergone any processing, as well as marriage, do not participate in the inventory.

The results of the inventory are reflected in the inventories for each workshop, section, division. According to the results of the inventory, postings are made:

WIP in reporting

AT balance sheet WIP is reflected in the second section "Current assets" on line 1210"Stocks". Organizations with long cycle production facilities may show WIP as non-current assets.

With a significant amount of WIP balances, they are reflected in a separate line in the balance sheet, and they also disclose more complete information about WIP in the appendix to the balance sheet and the income statement (for example, they draw up a WIP breakdown by workshop, production, stage).

What is work in progress

Work in progress is recognized:

• products (works) that have not passed all the stages (phases, redistributions) provided for by the technological process;

• incomplete products or products that have not passed tests and technical acceptance.

This is stated in paragraph 63 of the Regulations on accounting and financial statements.

Does not apply to work in progress:

• transferred to the workshops (to sites), but not subjected to processing, raw materials, purchased finished products ;

• unrepairable rejected semi-finished products.

This procedure follows from paragraphs 56, 97 and 98 Guidelines, approved by order of the Ministry of Finance of Russia dated December 28, 2011 No. 119n.

Work in progress can take place in the main and auxiliary production, as well as in the activities of service industries and farms.

accounting

During the reporting period, the cost of finished products (work performed) is formed by postings:

Debit 20 (23, 29) Credit 10 (02, 05, 23, 25, 26, 70, 69...)
- written off the cost of production (performance of work).

As the finished product is released (work is performed), the costs accumulated on account 20 are written off:

• in the debit of account 43 (account 90), if the organization keeps records of actual costs;

• to the debit of account 43 (accounts 90 or 40), if the organization keeps records of costs according to the norms:

Debit 43 (40, 90) Credit 20
- written off the cost of finished products (work performed) of the main production, handed over to the warehouse.

As finished products are released (works are performed) by auxiliary or service industries (farms), write off their cost from the credit of account 23 or 29. Depending on who their consumer is, debit them to the accounts of production costs or financial results(Instructions for the chart of accounts (accounts 23 and 29)). For more on this, see:

• How to reflect the costs of auxiliary production in accounting ;

• How to reflect in accounting the costs of service industries and farms .

The cost of the balance of raw materials and materials not written off to the cost of finished products (work performed) (debit balance on accounts 20, 23 and 29 at the end of the reporting period) is recognized as the cost of work in progress.

Ways to evaluate work in progress

Work in progress can be valued:

The selected method of estimating work in progress must be fixed (clause 7 PBU 1/2008).

This procedure is provided for in paragraph 64 of the Regulation on accounting and reporting.

For the valuation of work in progress when calculating income tax, see .

Estimated cost of raw materials

If an organization evaluates work in progress at the cost of raw materials, materials and semi-finished products, determine the cost of work in progress residues using the formula:

The number of balances of work in progress is determined at the end of the month based on the results of the inventory and (or) on the basis of primary documentation (form No. МХ-15). Draw up an act of inventory of work in progress in free form .

An example of determining the value of work-in-progress residues. The organization evaluates work in progress at the cost of raw materials, materials and semi-finished products

OJSC "Production Company "Master"" produces A4 paper. Accounting policy"Masters" provides for the assessment of work in progress at the cost of raw materials, materials and semi-finished products. Cost accounting is carried out using account 40.

In April, 20 cubic meters were transferred to production. m of wood with a total cost of 110,000 rubles. (without VAT). The cost of one cubic meter of wood is 5500 rubles/cubic meters. m. According to the results of the inventory as of April 30, the remains of wood were found in the production shops - 2 cubic meters. m.

Direct expenses amounted to RUB 203,906, including:

• the cost of the materials used - 110,000 rubles;

• salary of production workers - 74,000 rubles;

• the amount of contributions for compulsory pension (social, medical) insurance and contributions for insurance against accidents and occupational diseases from the wages of production workers - 19,906 rubles.

The amount of indirect expenses for the month amounted to 138,000 rubles.

The total amount of expenses of the organization for the month amounted to 341,906 rubles. (203,906 rubles + 138,000 rubles).

The following entries were made in the master's account:

Debit 20 Credit 10 (25, 26, 68, 69, 70...)
- 341,906 rubles. - taking into account the cost of paper production;

Debit 40 Credit 20
- 330,906 rubles. (110,000 rubles: 20 cubic meters × 18 cubic meters + 74,000 rubles +
RUB 19,906 + 138,000 rubles) - the actual cost of manufactured products is reflected.

The value of work in progress is:
RUB 341,906 - 330,906 rubles. = 11,000 rubles.

This difference represents the balance of account 20 at the end of April.

Direct cost valuation

When applying the method of estimating work in progress by direct cost items, distribute direct costs between the balances of work in progress and finished products in the same manner that is used to calculate income tax. See more on this.How to estimate the value of work in progress in tax accounting .

Estimated by actual, standard costs

When applying the method of estimating work in progress at actual or standard cost, the volume of work in progress is estimated based on conditionally natural indicators that the organization determines independently. For example, the equivalent number of finished products can be used as such an indicator.

To calculate the equivalent amount of finished products, you need to know the product readiness factor at each stage of the production process and the remains of raw materials that have not been processed (partially processed) (in natural meters). To calculate the balance of raw materials, materials that have not gone through the full production process, use form No. МХ-19, approved by the Decree of Rosstat of August 9, 1999 No. 66, or form No. M-17, approved by the Decree of the State Statistics Committee of Russia of October 30, 1997 No. 71a.

The product readiness coefficient at each subsequent stage of production is calculated on an accrual basis, taking into account the product readiness coefficient at the previous stage. The value of these coefficients should be set by the technological service of the organization.

To determine the amount of work in progress equivalent to the number of finished goods at the end of the month, you need to calculate the equivalent number of finished goods at each stage of the production process. To do this, use the formulas:

An example of calculating the cost of work in progress. The organization estimates work in progress at actual costs

JSC "Production company "Master"" is engaged in tailoring mink coats. As of April 1, there were no remains of work in progress. The accounting policy of the "Master" provides for the evaluation of work in progress at the actual cost. General business expenses at the end of the month are written off to account 20.

The chief technologist of the organization approved the readiness factors for a unit of production (fur coats) by stages of production:

• processing and dressing of skins - 20 percent;
• pattern cutting and tailoring of fur coats - 80 percent;
• laser processing of fur coats and the release of the finished product - 100 percent.

In April, 800 pieces of mink skins with a total value of 800,000 rubles were transferred to production. (without VAT). According to technological standards, 80 units of products should be produced from this amount of raw materials (800 pieces: 10 pieces / unit). As of April 30, 65 mink coats have been delivered to the finished product warehouse.

The direct costs of the "Master" for the production of products in April amounted to:

• the cost of consumed raw materials and materials - 800,000 rubles;

• salary of production workers (including contributions accrued from it for compulsory pension (social, medical) insurance and insurance against accidents and occupational diseases) - 154,000 rubles.

The amount of overhead costs - 42,000 rubles.
The amount of general business expenses - 56,000 rubles.

In April, the following entries were made in the account of the "Master":

Debit 20 Credit 10
- 900,000 rubles. - written off materials for the production of fur coats;

Debit 20 Credit 70 (69)
- 154,000 rubles. - the wages of production workers were accrued (taking into account contributions for compulsory pension (social, medical) insurance and insurance against accidents and occupational diseases);

Debit 20 Credit 25
- 42,000 rubles. - general production expenses are written off;

Debit 20 Credit 26
- 56,000 rubles. - debited general business expenses.

As of April 30, the remains of unprocessed (partially processed) materials were recorded:

• at the stage of processing and dressing skins - 50 pieces;
• n and the stages of pattern cutting and tailoring - 100 pieces.

Based on these data, the accountant determined the equivalent amount of finished goods in the balances at each stage of the production process. The volume of work in progress in equivalent units amounted to:

• at the stage of processing and dressing skins - 1 unit. (50 pcs : 10 pcs/unit × 20%);
• at the stage of pattern cutting and tailoring - 8 units. (100 pieces : 10 pieces/unit × 80%).

The volume of work in progress as of April 30 was:
1 unit + 8 units = 9 units

The total output for April, taking into account work in progress, is:
65 units + 9 units = 74 units

The total production costs for April are:
RUB 900,000 + 154,000 rubles. + 42 000 rub. + 56 000 rub. = 1,152,000 rubles.

The actual cost of finished products delivered to the warehouse is reflected in the posting:

Debit 43 Credit 20
- 1,011,892 rubles (1,152,000 rubles: 74 units × 65 units) - the actual cost of finished products for April was written off.

The cost of the balance of work in progress at the end of the month (debit balance on account 20 on April 30) is equal to:
RUB 1,152,000 - 1,011,892 rubles = 140 108 rubles.

Situation: can there be work in progress in the provision of services?

Yes maybe.

The volume of work in progress is added up in accounting (debit balance on account 20 "Main production") on the last date of the reporting period. The service is considered to be rendered if a bilateral act on the provision of the service is signed between the contractor and the customer and the customer has no complaints about its quality (clause 2 of article 720, 783 of the Civil Code of the Russian Federation).

If the contract for the provision of services is concluded for a period of more than one month, then the service is of a continuing nature. For such services, revenue can be recognized in two ways:

• step by step as services are rendered;

• at a time for the performance of the contract as a whole.

In the first case, there will be no balances of work in progress in accounting. This is due to the fact that all costs associated with the provision of services during the reporting month will be debited from account 20 in one of the ways fixedin accounting policies for accounting purposes :

• using account 46 "Completed stages of work in progress";

• without using account 46 “Completed stages of work in progress”.

For more information on how to write off expenses as services are provided, see How to reflect the implementation of works (services) in accounting .

In the second case, the costs associated with the provision of services can be taken into account as expenses (i.e., written off to account 90 “Sales”) only after the parties sign an act on the provision of services. Until this act is executed, the entire amount of expenses accumulated on account 20 for this service will form the cost of work in progress.

Regardless of the nature of the services provided (short-term or lasting), in tax accounting, executing organizations have the right to write off direct costs as expenses of the current reporting period without distribution to work in progress (clause 2 of article 318 of the Tax Code of the Russian Federation). In this regard, in the second case, discrepancies in the order of accounting for expenses will lead to the appearance temporary differences . In this regard, accounting will need to reflect deferred tax liability . Such a conclusion follows from the provisions of paragraphs 10, 15, 18 PBU 18/02.

Situation: how to reflect the sale of property in the form of balances of work in progress, accounted for on account 20, in accounting and tax accounting?

In accounting, refer the proceeds from the sale of property accounted for as part of the balance of work in progress to other income on the credit of account 91. Make an entry on date of transfer of ownership on them to the buyer (clause 7, 16 PBU 9/99). At the same time, write off the cost of the balances of work in progress to the debit of account 91 “Other income and expenses” as other expenses (clauses 11, 19 of PBU 10/99).

Record the sale of work-in-progress residues as follows:

Debit 62 Credit 91-1
- reflected the sale of the balance of work in progress;

Debit 91-2 Credit 68 sub-account "VAT calculations"
- VAT is charged (if the organization is a tax payer).

At the time of transfer of the balance of work in progress to the buyer, make a posting:

Debit 91-2 Credit 20
- written off the actual cost of the balance of work in progress.

Transfer the property accounted for as part of work in progress, issue act(Article 556 of the Civil Code of the Russian Federation).

When calculating income tax, the amount proceeds from the sale of property accounted for as part of the balance of work in progress, reflect in income from sales in the amount of the contract value, excluding VAT (clause 1, article 248, clause 1, article 249 of the Tax Code of the Russian Federation). And include the costs associated with the creation of property and its sale as part of the expenses (subclause 2, clause 1, article 268 of the Tax Code of the Russian Federation).

The sale of property, including that accounted for as part of work in progress, is recognized subject to VAT (signature 1, clause 1, article 146 and clause 3, article 38 of the Tax Code of the Russian Federation). Therefore, if the seller is a VAT payer, in moment of shipment (transfer) of property or receiving an advance payment under the contract calculate this tax (clause 1, article 167 of the Tax Code of the Russian Federation).

The objects of work in progress include raw materials, goods, products, semi-finished products, the processing of which has been started, but not completed.

The correct calculation of the volume of work in progress of the organization is necessary to determine the adequate finished goods. Consider the main WIP postings in accounting.

Rice. 1 - Work in Progress Evaluation Process

Cost of work in progress and construction

The cost of work in progress includes all costs that went directly to the processing of objects of "work in progress" with direct cost accounting.

When accounting for the full cost of WIP, all costs incurred in given period, both direct and indirect (). The latter method is more common.

Below is the posting for the calculation of the cost using the full cost method:

WIP write-off transactions

Below are the postings for the write-off of expenses for work in progress of the main activity. Similarly, postings are formed for the auxiliary activities of the organization.

Purchase of an object under construction

Real estate objects can be under construction in progress for a long time. However, they are often subject to sale and purchase.

Wiring:

Work in progress (WIP) represents not completely manufactured parts and assembly units, as well as products not accepted by technical control. The composition of work in progress includes: parts and semi-finished products of our own production, subject to further processing or assembly, incomplete products that have not passed tests and technical acceptance, repairable defects.

Work in progress does not include irreparable defects, materials in workshops that have not been processed, parts, assembly units and products on canceled orders, etc.

Proper valuation of work in progress is essential to accurately calculate the cost of goods produced, as well as to ensure the safety of work in progress parts and products in production.

In accounting, the actual value of costs in work in progress is the value of the debit balance in the accounts 20 "Main production" and 23 "Auxiliary production".

To determine the cost of work in progress, you must:

• - know its quantitative expression (number of parts, assembly units, products by stages of the technological process);
• - Make a valuation.

To more accurately determine the value of work in progress, one hundred inventory is carried out, usually at the end of the year.

Evaluation of work in progress can be carried out:

• - in a single production - according to the actual costs incurred;
• - in mass and serial production: according to the standard (planned) production cost; by direct cost items; at the cost of raw materials, materials and semi-finished products.

EXAMPLE 16.3

The publishing and printing organization, using a stamp, cuts blanks of a certain shape from paper, which are then folded into brochures. One sheet of paper makes 4 brochures. The cost of one sheet of paper is 200 rubles. The actual cost of processing one sheet of paper is 100 rubles. The balance of ΙΙ3Π at the end of the current month amounted to 400 pieces.

According to the accounting policy of the organization, WIP is valued at the actual production cost.

The cost of one blank at the actual production cost will be 75 rubles. ((200 rubles + 100 rubles) / 4 pcs.).

Consequently, the balance of WIP at the end of the current month will be equal to 30,000 rubles. (400 pieces x 75 rubles).

EXAMPLE 16.4

The publishing and printing organization in the process of manufacturing finished products produces semi-finished products. Actual production costs of 3000 units. semi-finished products amounted to:

• - raw materials and materials - 30,000 rubles;
• - labor costs - 50,000 rubles;
• - social insurance contributions - 14,000 rubles.

According to the accounting policy of the organization, WIP is valued at the standard cost, which is 300 rubles / unit.

The standard cost of WIP will be 90,000 rubles. (300 rubles x 3000 units), and the actual - 94,000 rubles. (30,000 + 50,000 + + 14,000).

The following entries are made in the accounting records of the organization:

DEBIT 20 "Main production" subaccount "Production of semi-finished products" CREDIT 10 "Materials", 69 "Calculations for social insurance and security", 70 "Settlements with personnel but payment of the pile", 76 "Settlements with various debtors and creditors"

94 000 rub. - written off the actual cost of manufacturing semi-finished products at direct costs;

DEBIT 21 "Semi-finished products of own production" CREDIT 20 "Main production" sub-account "Production of semi-finished products"

90 000 rub. - reflects manufactured semi-finished products at standard cost;

DEBIT 20 "Main production" subaccount "Production of finished products" CREDIT 20 "Main production" subaccount "Production of semi-finished products"

4000 rub. - written off the deviation between the actual and standard cost of semi-finished products.

EXAMPLE 16.5

The publishing and printing organization released 1000 units for production. printed materials raw materials in the amount of 100,000 rubles. (without VAT). For the current month, 900 units were released. finished products.

Direct expenses for the current month amounted to:

• - raw materials and materials - 100,000 rubles;
• - labor costs - 600,000 rubles;
• - social insurance contributions - 168,000 rubles;
• - depreciation deductions - 44,000 rubles.

It is necessary to evaluate the WIP for direct cost items, provided that the WIP balance for the previous month amounted to 40,000 rubles.

WIP for the current month will be equal to 100 units. (1000 - 900).

Let's determine the share of direct costs attributable to WIP in the current month.

Direct costs attributable to WIP in the current month will amount to 91,200 rubles. ((100,000 rubles + 600,000 rubles + 168,000 rubles + 44,000 rubles) / 1000 units x 100 units).

The balance of WIP at the end of the current month, estimated at direct costs, will be equal to 131,200 rubles. (40,000 + 91,200).

EXAMPLE 16.6

Let's change one condition of the previous example. Suppose that, according to the accounting policy of the publishing and printing organization, ΙΙ3Π is valued at the cost of raw materials, materials and semi-finished products. In this case, only the cost item "Materials" is taken into account in the calculation of work in progress.

The share of raw materials related to H3P will be equal to 10,000 rubles. (100,000 rubles / 1000 units x 100 units).

The balance of H3P at the end of the current month, estimated at the cost of raw materials, materials and semi-finished products, will amount to 50,000 rubles. (40,000 + 10,000).

In conclusion, we give typical accounting entries for accounting for production costs and costing (Table 16.1).

Table 16.1

Correspondence of accounts for accounting for production costs and costing

Work in progress (WIP) are products, products or works that have not passed the entire manufacturing technology, have not passed technological control or have not been accepted by the customer. The product may be in completely different stages of the manufacturing process.

Definition

One of main components of working capital considered work in progress. In various industries, its size and composition can vary significantly, this is influenced by the following factors:

• product parameters and manufacturing technology;
• time for a full production cycle;
• cost indicators of the enterprise.

WIP residues are various raw materials and materials, semi-finished products, as well as labor that is used by workers to turn materials into a finished product. In order to plan and keep records, indicators of time, cost, as well as labor in-kind indicators are used.

Cost indicator includes all costs incurred by the enterprise for the manufacture of products for a certain reporting period. Temporal is determined by the ratio of the balance of work in progress with the total output at cost.

In order to achieve the maximum reduction in work in progress, it is necessary to reduce the duration of the production cycle of the product. This is achieved by a higher organization of the technical level of production and labor.

Reflection on accounts

Account balances 20, 23 and 29 show amount of expenses, which is in the company's work in progress. In other words, they actually show the cost of products or works that have not gone through all the stages or redistributions that are provided for by the technology.

The "incomplete" also includes those products that did not pass the tests and were rejected by technical control, or understaffed.

In order to find out the costs of WIP, companies keep an accounting report, which indicates any reflections on the accounts for the reporting period. In the company's accounting department, costs are determined in one of four ways:

1. Calculation based on the cost of production.
2. According to the standard (planned) cost.
3. With the help of cost items.
4. At the cost of all consumables, semi-finished products and raw materials.

First way is fixed in accounting policy company management. In unit production, only the method of accounting for actual costs is used, since it is the most accurate of all. It includes absolutely all the costs incurred by the enterprise in the production of products or the provision of services. This method is equally good in both mass and single production.

Second way relevant for serial and mass production and assumes that each finished unit of finished product incurs planned costs, which are calculated by the economics department. The difference between the actual and planned cost is written off as an increase or decrease in the cost of goods.

According to third way, WIP costs include only direct costs, the list of which is approved by the accounting department.

Fourth way takes into account in the cost of WIP only the costs of raw materials, materials and semi-finished products that are used for production.

It should be noted that the last two methods are relevant only in enterprises with very high material consumption. In this production, the cost of finished products largely depends on the cost of raw materials or materials.

WIP refers to production stocks, according to 10 P (S) BU 9 "Reserves". Regardless of the chosen method of calculating production costs, work in progress is reflected in synthetic and analytical accounting. accounting entry debit 26 "Finished products" and credit 23 "Production".

Expenses

The smaller the volume of work in progress, the better working capital works.

At the same time, WIP should be sufficient in terms of volume, composition and placement (throughout the entire production line), as well as in order to maintain uninterrupted and uniform operation of the enterprise. This, in turn, is achieved, on the contrary, increase in work in progress.

When a report is prepared on the expenses of an enterprise, in all types of its activities, classification according to the following points:

• expenditure of material resources;
• depreciation funds;
• the cost of providing social needs;
• employee payroll costs;
• other costs.

All products (works) that for some reason have not been completed, have not yet entered production, have not passed tests and technical acceptance, are classified as WIP. Serial, mass production is reflected in the balance sheet at following paragraphs:

• the price of raw materials, materials and semi-finished products;
• direct costs of raw materials;
• planned production cost (actual or standard).

In the balance sheet of those enterprises that are engaged in a single release of certain products, work in progress is displayed on the fact of direct costs.

Those costs that the organization made during the preparation of reports, but they relate to subsequent reporting periods, are taken out by the accounting department in a special article. These costs are characterized as costs of the next reporting periods and they should be written off.

The write-off occurs evenly, in the manner established by the enterprise, during the period to which the expenses relate.

tax accounting

When calculating income tax, the payer must determine the number of direct and indirect costs in his accounting system.

In order to include any costs as direct costs, there must be direct connection these costs with the production of products, the provision of services or the performance of work.

The enterprise has the right to attribute some costs for the manufacture of products or for works and services to indirect costs. This is allowed only if there is no connection between these costs and direct costs. For this you need to apply economic justification.

Direct costs are distributed in an independently established manner for WIP and products that were manufactured in a given month, as well as works and services. At the same time, it is very important that all expenses corresponded to the list of products manufactured, works and services performed.

If direct costs cannot be attributed to a certain stage in the manufacture of a particular product (work, service), then a mechanism for sharing such costs using economic justifications should be created. This mechanism must be applied at least two tax periods.

The provision of a service can be classified as a work in progress, because some of the types of services may have material results received by the customer. For example, consulting or audit services.

By providing services of this kind, the taxpayer may keep records of direct costs. According to tax law, has the right to distribute direct and indirect costs for the provision of services and unfinished services.

WIP includes even completed services, but not yet accepted or rejected by the client. They also include unfinished orders and the remains of semi-finished products as a result of their production. Those materials that have already entered the production process, but have not yet been processed, not included in the NPP.

Simply put, work-in-progress for service companies will be those services that are not yet fully completed, as well as those that the customer has not yet accepted.

At the end of the month, the taxpayer must estimate of the remaining WIP. It is done on the basis of data obtained from the primary documentation on the promotion and balances of unfinished services, as well as tax accounting data on direct expenses for the month

Inventory

WIP inventory for each enterprise or company is different, as they can differ significantly manufacturing process technology. Generally, main tasks of the inventory:

• establishing the actual number of parts, assemblies, assemblies and mechanisms that are in the shops and production sites, as well as those that have not been assembled or not fully manufactured;
• determination of the completeness of all production facilities with parts, materials or semi-finished products;
• determination of WIP balances for failed or canceled orders.

Before starting the inventory, you need to stock all parts, mechanisms, semi-finished products, assemblies, as well as those materials and components that are no longer used at the current stage. After that, you can start the inventory, which occurs through the actual counting, weighing or renaming.

The result of the inventory is document (inventory), which is issued for each production site or workshop. It contains the names of all parts, materials, mechanisms and assemblies, as well as their quantity, condition and volume.

For construction and installation work a special inventory is drawn up, which indicates the total amount of work on unfinished objects, types of work, their queue.

All raw materials expendable materials, semi-finished products and other materials that have not yet entered the processing process are indicated in separate inventories. For parts with marriage, a separate inventory is also compiled.

For those industries that are engaged in the production of heterogeneous masses and combine different raw materials, an inventory of WIP should be carried out according to two technologies: control of the quantity of products and control of the quantity of components that make up the product.

For the inventory of global construction, the inventory documents indicate the name of the building and the amount of finished work. Each type of work, structural element, equipment and machinery for the facility is also described in detail.

In this case, the received equipment is determined, which has not yet been installed. Construction sites that have been mothballed, or those on which work has been suspended, are also subject to inventory.. The inventory indicates the readiness of the facility, the cost of the work and the reasons why the construction was stopped.

Reflection in reporting

Work in progress can be reflected in the accounting reports:

1. On the fact of costs incurred in a single production.
2. In serial production at cost, planned cost, cost items and the cost of all materials and raw materials.

To determine the total amount of work in progress, the inventory or documentary method. To summarize data on WIP costs, in accordance with the Instructions for the use of the Chart of Accounts, you need to apply account 20 "Main production".

The debit of this account includes all direct and indirect costs, as well as the costs of auxiliary and other industries related to the manufacture of products. The credit reflects all amounts of the cost price upon the fact of finished production. In the end of the month account balance 20 shows WIP value.

WIP will exist only in cases where the result of production or services is material. This is possible in the manufacture of products or in the performance of work.

In accounting, work in progress is understood as the total amount of costs spent on production - the cost of materials, wages to employees, equipment, energy, depreciation, etc. At the same time, production or work has already been started, but has not yet been completed by the time the reports are made.

The WIP inventory process in 1C is presented below.