Hi Roxy
You mention pricing up, but also year end. Am confused (very easy today as rather a long day), probably being a it thick. But what is it that you are trying to achieve exactly?
What kind of finished goods are you talking?
Are you the Accountant or bookkeeper?
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Hi Joanne,
Thanks for the reply. I'm working on year end preparation to pass on to the accountant. See below, added a bit of further info for the whole picture!
We manufacture timer frame components to build houses etc from raw materials purchased, we had finished goods in our yard ready for delivery after year end. I need to put a value to these but I'm not sure if it should be the sales or cost price?
I'm sure it's sales figure, but my mind has gone blank!
Thank you
Hi,
I'd go with IAS 2 - Value being the lower of cost and net realisable value.
Within IAS 2 there are at least two exceptions, one is based around biological assets, the other is construction assets (IAS 11) so depending upon what the assets are used for could null my initial answer.
I know you mention houses and I know I don't know enough about construction so.... :)
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
Do they just manufacture? Or are they involved in the rest of the construction? Given its a precision engineered bit of kit! I see where Johnny is coming from with this but agree there doesnt appear to be enough information here Im afriad.
The finished goods ready for delivery - have they already been logged as sales? (You have sales orders, but have not yet issued invoices?).
Is this an urgent one? Just wondering if its one we can look at with the benefit of having more detail and when folk have more time (and we can entice some of the construction industry advisors to join in as well) after the end of January. Would be a great one to flesh out.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Thanks for replies guys! I will check out the IAS that Johnny mentions.
It can wait till the end of Jan...I know its a busy period!
Here is a very basic process flow of what we do.
1.Receive order to manufacture and construct a timber frame building (either flats or houses usually)
2.Raw materials purchased specifically for that order
3.Manufactured into Timber Frame components specifically for the order in our Factory
4.Delivered to site
5.Construction of Timber Frame components that makes the shell of the building (like a 3d jigsaw)
At year end we had got the end of point number 3, so components were ready to be delivered but were not required on site until after year end. No invoices will be raised until the components are delivered to site.
Everything that is manufactured in the factory is always bespoke to each project.
Hopefully that helps...I am not great at explaining things!
Hi Roxy
Thanks for that.
Reckon the only missing piece of the jigsaw then is how the contracts work (which in part will show when a sale become a sale). Plus - what happens if you manufacture a full unit and its sitting in your yard and the said buyer changes their mind?
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
