How to write off work in progress

When forming the cost of production and closing the accounting period, it is necessary to calculate and write off the value of work in progress. Its volume is calculated according to the results of the inventory or by the documentary method, when the balance is estimated based on the primary documents.

Instruction manual

1

Determine the volume of work in progress based on the results of the inventory conducted at the end of the month. Reflect its results in the inventory.

2

Calculate the share of work in progress in its total volume for the accounting period. To do this, add the cost of work performed to the cost of work in progress at the beginning of the month. Divide the cost of outstanding work at the end of the month by the number received.

3

Distribute the amount of direct costs between completed orders and work in progress in proportion to the calculated share of "work in progress" in the total volume of work. To do this, add to the balance of the actual direct costs at the beginning of the month the total amount of actual direct costs according to the accounting data (turnover on the debit of account 20 “Main production”) and multiply them by the share of work in progress at the end of the month.

4

When determining the composition of costs that reduce taxable income, do not include in their composition costs related to work in progress. Their value will be on the balances of account 20 "Main production" (account 23 "Auxiliary production", 29 "Serving production").

5

Reflect the work in progress on account 46 "Completed stages of work in progress" if your organization takes into account the costs of individual stages of work performed.

6

Make an accounting entry in the accounting record when a customer pays for each completed work step: Debit of account 46, Credit of account 90 "Sales". After the object is completed, make a transaction for writing off work in progress: Debit of account 62 "Settlements with buyers and customers", Credit of account 46 "Completed stages of work in progress".

• Determining the cost of production
• how to write off completed work