Concept Of Work-in-Progress Value In Contract Account

Work-in-progress value = Work certified value + Work uncertified value

The volume of the work done by the contractor under the terms of a contract to date is called work-in-progress. Work-in-progress value makes it possible for the contractor to check the time schedule to complete the contract work. The work progress expressed in monetary value is appropriately termed work in progress value. The contract account is credited by giving debit to work-in-progress account showing distinctly the work certified and the work uncertified values. Working-in-progress may be categorized into:

* Certified work-in-progress value or work certified value
The value of complete contract work contained in a certificate issued by the contractee's architect is known as work certified value.
% of work-in-progress = (work certified/contract price) X 100

* Uncertified work-in-progress value or work uncertified value
Uncertified work-in-progress value is the summation of material, labor, expenses and indirect cost incurred for the contract work waiting for the architect's certificate after verification.

Related Topics
Concept And Meaning Of Contract Costing
Features Of Contract Costing
Concept Of Contract Account
Concept Of Work Cost Or Contract Cost

2 comments:

  1. Please describe it in a simple language.so that a layman can too understand.

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