Please can anyone solve my query regarding calculation of WIP (Closing Stock) in the business of builders and Developers? If possible elaborate with example.
12 December 2012
Calculation of WIP in case of builders and developers is same as in any other business.
Under project completion method, the project that the builder is handling,if not completed during the year under consideration, remains as WIP. The total cost of construction including labour cost till date would be treated as WIP.
Under Percentage Completion Method, the project cost not charged to P&L would be treated as WIP.
For detailed information kindly refer ICAI publication on the subject matter.
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