work in progress

Examples of work in progress in the following topics:

• Categories of Goods Included in Inventory

  • The firm's work in process includes those materials from the time of release to the work floor until they become complete and ready for sale to wholesale or retail customers.
  • Work in process or work in progress (WIP) - Materials and components that have began their transformation to finished goods.
  • Optimal production management aims to minimize work in process.
  • The firm's work in process includes those materials from the time of release to the work floor until they become complete and ready for sale to wholesale or retail customers.
  • Distinguish between the raw materials, work in process, finished goods and goods for resale

• Working Capital Management Analysis

  • It is a derivation of working capital commonly used in valuation techniques such as discounted cash flows (DCFs).
  • Decisions relating to working capital and short term financing are referred to as working capital management.
  • Working capital management entails short-term decisions, usually relating to the next one-year period and are based in part on cash flows and/or profitability.
  • Because this number effectively corresponds to the time that the firm's cash is tied up in operations and unavailable for other activities, management generally aims for a low net count.
  • When ROC exceeds the cost of capital, firm value is enhanced and profits are expected in the short term.

• Objectives of Accounting

  • Specifically, the information should be useful to investors and lenders, be helpful in determining a company's cash flows, and report the company's assets, liabilities, and owner's equity and the changes in them.
  • With these objectives in mind, financial accountants produce financial statements based on the accounting standards in a given jurisdiction.
  • These include the standards, conventions, and rules that accountants follow in recording and summarizing, and in the preparation of financial statements.
  • They are a consequence of growing international shareholding and trade and are particularly important for companies that have dealings in several countries.
  • They are progressively replacing the many different national accounting standards.The rules to be followed by accountants to maintain books of accounts which is comparable, understandable, reliable and relevant as per the users internal or external.

• Recognition of Revenue Prior to Delivery

  • A transfer of value takes place between a buyer and seller when the buyer receives goods in accordance to a sales order approved by the buyer and seller and the seller receives payment or a promise to pay from the buyer for the goods purchased.
  • In order words, for sales where cash was not received, the seller should be confident that the buyer will pay according to the terms of the sale .
  • Percentage-of-completion method: if a long-term contract clearly specifies the price and payment options with transfer of ownership -- the buyer is expected to pay the whole amount and the seller is expected to complete the project -- then revenues, expenses, and gross profit can be recognized each period based upon the progress of construction (that is, percentage of completion).

• Copyrights

  • A person who creates a work of authorship has a copyright the moment the work is created and is fixed in a form that either a person or machine can read.
  • As a result, an author does not have to register their work with the U.S.
  • Formally registering a work is generally recommend because it provides additional legal protection against those who would copy the work.
  • If the business developed the work in question, the value of the copyright is equal to the cost the business incurred securing the copyright.
  • The business will record an amortization expense to reflect the decrease in the asset's value.

• Internal Controls

  • An inventory management system is a series of procedures, often aided by computer software, that tracks assets progression through inventory.
  • When the company receives that material, the amount should be noted in the inventory management system.
  • The auditor will then compare the count to the related information in the inventory management system.
  • Cycle counting should only be performed in facilities with a high degree of inventory accuracy.
  • Clerk conducting physical inventory count using a handheld computer in a Tesco Lotus supermarket in Sakon Nakhon, Thailand

• Introduction to IFRS

  • They are progressively replacing the many different national accounting standards.
  • The IASB and FASB frameworks are in the process of being updated and converged.
  • The project also intends consider the changes in the economic environment that have occurred in the two or more decades since the concepts were first developed.
  • In the absence of a Standard or an Interpretation that specifically applies to a transaction, management must use its judgment in developing and applying an accounting policy that results in information that is relevant and reliable.
  • Units of constant purchasing power: capital maintenance in units of constant purchasing power at all levels of inflation and deflation in terms of a Daily Consumer Price Index or daily rate only under the Capital Maintenance in Units of Constant Purchasing Power paradigm.

• The Role of Accounting in the Business

  • These people are all stakeholders in the business, which is to say they’re interested in its activities because they’re affected by them.
  • More importantly, accountants make sure that stakeholders understand the meaning of financial information, and they work with both individuals and organizations to help them use financial information to deal with business problems.
  • Accountants typically work in one of two major fields.
  • Reports are tailored to the needs of individual managers, and the purpose of such reports is to supply relevant, accurate, timely information in a format that will aid managers in making decisions.
  • In preparing, analyzing, and communicating such information, accountants work with individuals from all the functional areas of the organization—human resources, operations, marketing, and finance.

• Reporting R&D Cost

  • A cost which cannot be deducted in the year in which it is paid or incurred must be capitalized.
  • In this case, the contract usually specifies that all direct costs, certain specific indirect costs, plus a profit element, should be reimbursed to the enterprise performing the R&D work.
  • It is the company for whom the work has been performed that reports these costs as R&D and expenses them as incurred.
  • The costs associated with R&D activities and the accounting treatment accorded them are as follows: expense the entire costs, unless the items have alternative future uses (in other R&D projects or otherwise), then carry as inventory and allocate as consumed, or capitalize and depreciate as used.

• Nature of Inventory

  • The firm's work in process includes those materials from the time of release to the work floor until they become complete and ready for sale to wholesale or retail customers.
  • These holdings are recorded in an accounting system .
  • Time - The time lags present in the supply chain, from supplier to user at every stage, requires that you maintain certain amounts of inventory to use in this lead time.
  • However, in practice, inventory is to be maintained for consumption during 'variations in lead time'.
  • Work in process, WIP - materials and components that have began their transformation to finished goods.