Reviews on Accounting of Revenues Associated to the Production Cost of the Work in Progress
Reviews on Accounting of Revenues Associated to the Production Cost of the Work in Progress

Summary/Abstract: Revenues associated to the production cost of the work in progress are revenues which do not generate monetary income in the very next period; as sources of virtual enrichment for the enterprise, they are valued, for reasons of prudence, at the level of the production costs. At the level of principle, we can discuss how to separate costs of the finished products for production in progress, particularly difficult problem seen in practice and which, in most cases, makes the productive entities either to give up the actual determination of production costs or to make an improvised calculation. Given the existence of two types of production in progress at the beginning and end of the period, in order to separate the costs between the two elements it is necessary to use the stock assessment methods, as shown in IAS 2, respectively the weighted average cost method (WAC), the FIFO method and the standard cost method, methods used in theory and practice exclusively for evaluating stocks, other than those of finished products, let alone for the production in progress. In our opinion, the issue is not the accounting method for revenues associated to the production cost of the work in progress, but the evaluation method of the output obtained and stored, especially when you get both finished products and products in progress.

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