What is considered work in progress? - this question sooner or later arises before many accountants. How do you understand what should not be considered WIP? The answer is in this article.

What costs are meant by work in progress?

What to unfinished production refers, define regulatory documents:

1. Tax Code of the Russian Federation, namely Article 319.
2. Order of the Ministry of Finance of the Russian Federation “On approval of the Regulations on maintaining accounting And financial statements V Russian Federation» dated July 29, 1998 No. 34n (hereinafter referred to as order No. 34n).
3. PBU 4/99.

TIP: pay attention to PBU 5/01 “Accounting for inventories” to clearly understand the difference between inventories and non-material assets. Work in progress does not belong to inventories, despite the fact that when compiling a balance sheet in current assets, the amount of work in progress is also included in the item “Inventories”.

So what about work in progress Can attribute and what costs are meant by this term? About the costs that an enterprise incurred for the production of work, goods, products, services, but the full production cycle for which has not yet been completed, we can say: What They belong to work in progress.

Such goods and products have not yet been released by the production department, have not been registered as finished products, and have not passed all the necessary stages of acceptance and inspection. Services and works for which certificates of completion have not yet been signed by the customer are classified as work in progress.

The amount of assets, , in large enterprises with a large number of products can be formed in accounting in three ways (clause 64 of order No. 34n):

• by the amount of costs for materials, raw materials, components;
• by direct costs;
• at actual production cost.

For other types of production, the cost of work in progress is taken into account at actual costs.

Characteristics of work in progress

Assets, what is considered work in progress?, have the following characteristics.

• Incompleteness technological cycle . WIP products do not have finalization, is at the final stage of the production cycle, but has not yet been formalized as a finished product.
• No final stage of inspection or testing. Products and work that are awaiting testing or quality control as required by the technological or production cycle. For example, industrial installation, intended for work in chemical production under high pressure, must undergo a production test for high pressure. Until such verification has been carried out, the installation is not considered a finished product and cannot be released to the buyer. And this means What she applies to work in progress. The cost of such an installation is reflected in the debit of the 20th account.
• Missing all components. Sometimes during production situations arise when the necessary components are not available (not in stock, not delivered on time by suppliers, changes have been made to the product design). Products awaiting final assembly are classified as work in progress.

Work in progress is formed not only on the 20th account. Auxiliary workshops and service industries and farms can also form the value of assets, what is considered work in progress?. Therefore, one of the characteristics of WIP is the place where the value is formed:

• main production (account 20),
• auxiliary workshop (account 23),
• servicing workshops or farms (account 29).

You can read more about the formation of costs for work in progress in the article.

What assets include work in progress?

Current assets of an enterprise are assets that have a period of circulation, acquisition or use of less than 12 months, or these assets are used (circulated) during the normal production cycle (if it is longer than 12 months).

PBU 4/99 states that when preparing the balance sheet of an enterprise, in the “Current assets” section, in addition to inventories, finished products, Money, accounts receivable assets are also added, what is considered work in progress?. The cost of work in progress is summarized in the balance sheet item “Inventories” with the amount of other current assets belonging to this type.

Test: which of the following applies to work in progress?

Check if you understand well what is classified as work in progress? We offer using a test question.

Check all options that qualify as WIP.

A. Finished products in warehouse.

B. Raw materials and supplies received by the workshop.

B. Semi-finished products manufactured by the auxiliary workshop, ready to be sent to the next stage of processing in the main production.

D. Products that have not passed the acceptance of the technical control department.

D. Raw materials and materials in the enterprise warehouse.

E. Products that have not passed the stage of mandatory technological testing.

Answer: to the number of assets, which relate to work in progress, of the above options include the assets specified in paragraphs: C, D, E.

Results

Making a decision what is classified as work in progress?, there is one simple principle to consider. It lies in the name of this asset - the principle of incompleteness. Everything that is produced by the enterprise (including work and services), but is not completed, verified or tested, is included in the work in progress.

One of the key tasks of employees of almost all organizations without exception is to directly provide economic benefits to the enterprise - and production personnel are precisely those employees who directly influence the generation of business income. However this definition is incomplete - in particular, in the question of who belongs to production personnel and what professions belong to them, economic theory and legislation do not provide clear answers.

Production personnel - what is it?

When considering the question of what it is - production personnel, first of all it is necessary to understand the key principles of creating a personnel structure at the enterprise. Despite the fact that each organization may have its own, separate, specific personnel structure, general principles her creations are the same . In most cases, workers can be divided into two key groups:

• . This category of workers includes all managers - both individual departments, and senior management of the enterprise, as well as employees who do not influence the actual formation of the organization’s income, but have great importance for the functioning of the organization. For example, administrative personnel may include employees of the accounting department or human resources department.
• Production personnel– this is a general category that includes, first of all, all specialists and workers who are actual performers, whose activities provide the organization with its income or the performance of its main functions. However, in most cases, production personnel also include lower-level service workers.

It should be noted that in economic theory There may also be other principles by which the division of workers is carried out. In particular, it may be assumed separate division for administrative, production and service personnel. In addition, a deeper structure of division of workers may also imply the presence of support or administrative and technical personnel.

Directly by the provisions of the current labor legislation There is no provision for dividing employees into production or administrative personnel. However, employers and employees can partially rely on the standards of uniform qualification reference books– for working professions and employees. Which, in turn, divide the various positions of workers.

Accordingly, the direct division of employees into different kinds personnel is optional. However, it is appropriate, as it allows the employer to more effectively assess the use of labor resources and their actual ratio. At the same time, the quality of work of production personnel and their effectiveness can be assessed relatively easily. The employer can draw up the legal basis for this division himself, fixing the assignment of certain positions to the category of production personnel of the enterprise by drawing up the relevant local regulations of the organization.

Who belongs to the production personnel of the enterprise

Both many job seekers and employers are interested in what production personnel are and what professions they are. Since this concept does not provide for a clear legislative division, views on this issue may differ in different currents of economic theory. However, the most common division of production personnel is made as follows:

As can be understood from the above list, production personnel do not necessarily have to participate in the production process. However, practical participation in it or simply directly bringing profit to the enterprise with one’s labor and not belonging to management employees can clearly indicate that the employee belongs specifically to the production category of workers.

Tasks of the organization's production personnel

Clearly defining the tasks of an organization’s production personnel is quite complex, but necessary process for every employer. Given the wide number of possible professions that fall into this category of employees, it is quite difficult to determine the specific tasks and functions of production personnel. Yes, the only one common task there will be direct execution of decisions of senior management and conduct of work activities in accordance with the internal labor regulations of the organization or other local regulations regulating labor activities.

Examples specific tasks production personnel can be called:

• Serving clients and providing them with services. In this case, production personnel can take part in various stages communication with clients, however, the main difference in this area is the direct execution of tasks, and not the solution full complex issues related to finding clientele, developing an approach to consumers, in contrast to .
• Production. Direct participation in production process, at any practical stage, is often the main task of the workers who represent a large part of the manufacturing class.
• Service to the organization. Performing your tasks within employment contract or other documentation in order to ensure efficient work organization may be the main function of production personnel.

In most cases, production personnel are required to have the same personal qualities as performers. That is, high learning ability, stress resistance, productivity. Motivation, creativity and the desire for development, development and implementation of innovations are not necessary for workers in this category, while such skills can be decisive for administrative and managerial personnel.

Other features of the activities of production personnel

Employers should take into account certain features when regulating the activities of production personnel, since they have quite significant differences from administrative and managerial personnel in many aspects of work. In particular, employers should carefully review the following features labor of production personnel:

Composition and classification of expenses by common types activities. We will talk about general production costs in this material.

General production expenses include

General production costs- these are expenses for ordinary activities that arise in connection with the maintenance of the main and auxiliary production facilities of the organization.

Thus, general production costs include, in particular:

• expenses for the maintenance and operation of machinery and equipment;
• expenses in the form of depreciation and repair costs of fixed assets and other property used in production;
• expenses for insurance of property used in production;
• costs for heating, lighting and maintenance of premises;
• rent for premises, machinery, equipment, etc., used in production;
• remuneration of workers engaged in production maintenance;
• other expenses similar in purpose.

It is important to take into account that the composition of general production and general business expenses is determined by each organization independently, taking into account its specifics. At the same time, the difference in production costs general from the costs of main production and general business expenses is manifested in the order of their accounting, as we talked about in.

After all, total production costs include those costs associated with production that cannot be directly attributed to a particular type of product. Therefore, the answer to the question whether general production costs can be classified as indirect costs will be positive. After all, if general production expenses are direct, then they should be taken into account directly as expenses of the main production, and not collected in advance on account 25 “General production expenses” (Order of the Ministry of Finance dated October 31, 2000 No. 94n). General production expenses include only such other production expenses, the relationship between which and specific type of manufactured products is not obvious.

At the same time, the composition of overhead costs can include a constant part of expenses and variable overhead expenses.

Overhead budget

In we talked about production cost estimates, which are prepared for planning and managing costs. At the same time, this estimate may separately highlight the costs of main production, general production costs and costs of another nature. The organization develops the general production cost estimate form independently based on specific detailing needs.

Auxiliary production is created at large enterprises in addition to the main production lines. The costs of auxiliary workshops are taken into account in calculating the cost of manufactured products. From the reliability of cost accounting different groups production and proper distribution of invested resources depend on the objectivity of the organization’s pricing policy. The procedure for planning and accounting for production expenses is regulated by the norms of Order of the Ministry of Industry and Science of January 4, 2003 No. 2.

What applies to auxiliary production

Ancillary manufacturing facilities are subsidiary units to the main product production lines. The tasks of support departments may include:

• supply of energy resources;
• transport maintenance;
• repair and modernization of fixed assets;
• creation of tools, parts, fasteners, preparation of spare parts;
• erection of temporary structures;
• extraction of construction raw materials and materials;
• logging work;
• processing of agricultural products.

Auxiliary production facilities are needed to ensure the uninterrupted production process and at the same time minimize production costs. Additional services in favor of third parties. They are formed in the form of separate workshops, departments and structural divisions, can be represented by laboratory centers, counting stations and computing complexes.

NOTE! Auxiliary production does not include enterprise services that are part of departments or structural units (design units, Chief Engineer or chief power engineer).

The characteristic features of an auxiliary production unit are:

• lack of manufacturing capabilities for core product lines;
• focus on servicing the main workshops and the availability of facilities with equipment for the production of semi-finished products;
• the results of work in auxiliary departments when transferring manufactured semi-finished products to the main technological department are reflected in the calculation of the cost of goods.

Auxiliary production is divided into the following types:

• Mechanical repair workshops.
• Transport departments.
• Energy economy.
• Refrigeration equipment service departments.
• Construction of temporary structures on construction sites.
• Warehouse facilities.

BY THE WAY! With a significant increase in the share of the products they produce in relation to other areas of activity, auxiliary production can become the main production divisions.

Repair shops are responsible for diagnosing equipment, repairing it and regularly preventive maintenance. Energy structures may include:

• boiler rooms:
• sewer communications;
• water supply system;
• electrical substations;
• transformer installations;
• diesel or gasoline generators;
• gas and electric networks;
• radio networks;
• furnace equipment;
• electrical equipment repair department.

Energy management is required for large volumes of energy consumption. The department is responsible for energy production and its supply to production workshops. Transport departments use several types of vehicles:

• external;
• in-shop;
• intershop;
• warehouse

For continuous transport services, piping systems and conveyor structures can be used.

Warehouse facilities are needed to create stocks of products and semi-finished products and ensure the safety of goods. Warehouse areas can be used for short-term and long-term placement of product groups. According to their purpose, warehouses are closed, open and semi-closed, supply, general plant, workshop, production, and sales. Depending on their functionality, warehouses are classified into universal or specialized categories.

Expenses for auxiliary production

In paragraph 4.28 Methodological recommendations, approved by Order No. 2 of 01/04/2003, states that expense transactions of auxiliary production are accounted for similarly to the methodology of the main workshops. Summary estimates must be verified with the volume of work performed, next stage the final cost of production is formed.

The distribution of costs of auxiliary departments between other divisions of the enterprise is carried out as a percentage of the amount of self-made semi-finished products consumed by each department.

The process of redistributing the costs of auxiliary production between other related workshops is necessary to reliably determine the actual cost of finished products.

When auxiliary departments perform service functions, all expenses are taken into account among general production costs. If the auxiliary structures are service departments or sales departments, then the expenses are classified as commercial expenses.

The following types of expenses of auxiliary departments can be distributed between the workshops of the main production cycle:

• remuneration of the workers involved;
• cost of materials and raw materials transferred to production;
• maintenance of premises.

These indicators can act as criteria for the proportional division of expenses. An additional factor by which costs can be divided is the number of employees in departments.

Accounting for auxiliary production

To reflect in accounting the costs incurred by auxiliary productions in accordance with the provisions of Order of the Ministry of Finance No. 94n dated October 31, 2000, synthetic account 23 “Auxiliary productions” is used. The debit turnovers show:

• direct costs that have a direct impact on the manufacture of products and the process of providing services;
• indirect type of costs that are associated with management functions and maintenance of production lines, losses from defective products.

REMEMBER! The ending account balance reflects the monetary value of the production remaining in progress at the reporting date.

Account 23 is included by legislators in the group of active accounts, debit transactions are carried out, and output is reflected in credit finished products or the amount of work performed. Analytics is carried out for individual auxiliary productions by opening its own sub-account for each of them.

Postings

Correspondence on accounting for expenses of auxiliary production can be divided into two blocks:

1. Reflection of costs.
2. Write-off of expenses.

When creating expenses on account 23, the following standard transactions can be used:

• D23 – K10 when reflecting the costs of materials for manufacturing products;
• D23 – K60 when accepting invoices;
• D23 - K69 is used at the time of calculating insurance premiums for wages;
• D23 – K70 for the amount of wages for employees of auxiliary workshops;
• D23 - K25, if it is necessary to show general production expenses at auxiliary facilities in accounting;
• D23 – K26 is used to account for general business expenses;
• D23 – D28, the cost includes losses incurred from culling;
• D23 - K02 (04) to reflect the amounts of accrued depreciation on the assets of auxiliary departments (fixed assets or intangible assets).

When writing off consumables to the cost of production of the main production, the following entries are made:

• D10 - K23 when reflecting the fact of receipt of semi-finished products manufactured by auxiliary departments into the main production;
• D11 – K23 is formed when animals gain weight, increasing their value;
• D20 – K23 – costs incurred by auxiliary structures are redistributed to main production;
• D 26 - K23 - a record is compiled at the time of writing off the costs incurred to maintain the control apparatus.

If the products produced by auxiliary workshops were used for sale to third-party customers, then two entries are generated in accounting at once:

• D62 - K90.1 or 91.1 to reflect income;
• D90.2 or 91.2 - K23 to account for cost as part of the expense base.

VAT payers must additionally make a record of their tax accrual - D90.3 (or 91.2) - K68.

Article 32. Classification of buildings, structures, structures and fire compartments by functional fire danger
1. Buildings (structures, structures, fire compartments and parts of buildings, structures, structures - premises or groups of premises functionally interconnected) according to the class of functional fire hazard depending on their purpose, as well as on age, physical condition and the number of people in the building, structure, structure, the possibility of them being in a state of sleep is divided into:
1) F1 - buildings intended for permanent residence and temporary stay of people, including:
a) F1.1 - preschool buildings educational institutions, specialized homes for the elderly and disabled (non-residential), hospitals, dormitories of residential educational institutions and children's institutions;
b) F1.2 - hotels, hostels, dormitories of sanatoriums and general rest houses, campsites, motels and boarding houses;
c) F1.3 - multi-apartment residential buildings;
d) F1.4 - single-apartment residential buildings, including blocked ones;
2) F2 - buildings of entertainment and cultural and educational institutions, including:
a) F2.1 - theaters, cinemas, concert halls, clubs, circuses, sports facilities with stands, libraries and other institutions with an estimated number seats for visitors in enclosed spaces;
b) F2.2 - museums, exhibitions, dance halls and other similar institutions in enclosed spaces;
c) F2.3 - buildings of institutions specified in subparagraph "a" of this paragraph, in the open air;
d) F2.4 - buildings of institutions specified in subparagraph "b" of this paragraph, in the open air;
3) F3 - buildings of public service organizations, including:
a) F3.1 - buildings of trade organizations;
b) F3.2 - buildings of public catering organizations;
c) F3.3 - train stations;
d) F3.4 - clinics and outpatient clinics;
e) F3.5 - premises for visitors of consumer and public service organizations with an unreasonable number of seats for visitors;
f) F3.6 - physical education and health complexes and sports training institutions with premises without stands for spectators, household premises, baths;
4) F4 - buildings of scientific and educational institutions, scientific and design organizations, governing bodies of institutions, including:
a) F4.1 - buildings of general education institutions, educational institutions additional education children, educational institutions of primary vocational and secondary vocational education;
b) F4.2 - buildings of educational institutions of higher professional education and additional professional education (advanced training) of specialists;
c) F4.3 - buildings of governing bodies of institutions, design and engineering organizations, information and editorial and publishing organizations, scientific organizations, banks, offices, offices;
d) F4.4 - fire station buildings;
5) F5 - buildings for industrial or warehouse purposes, including:
a) F5.1 - industrial buildings, structures, buildings, production and laboratory premises, workshops;
6) F5.2 - warehouse buildings, structures, structures, parking lots for cars without Maintenance and repair, book depositories, archives, warehouses;
c) F5.3 - buildings for agricultural purposes.
2. The rules for classifying buildings, structures, structures and fire compartments into classes of structural fire hazard are determined in regulatory documents on fire safety.

The list of buildings belonging to one or another functional fire hazard class cannot be exhaustive. but the landmark is marked. There are no rooms with electrical panels on this list; there are no rooms at all. but only buildings. However, premises of a different class can be built into a building of any class. Electrical rooms are closest to F5.1, right? But the cleaner’s room, which designers often call a storage room for cleaning equipment, is difficult to classify as a production or storage room. But calling this room a pantry, the same root as a warehouse, they themselves dug a hole for themselves. In my opinion, warehouse and pantry are not synonymous, but not everyone understands this. Therefore, the cleaning lady’s room should not be called a pantry. then you won’t have to categorize it.