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There is an audit query raised by our external auditors (EY) with regard to the closing balance of  WIP Account ( GL- 110101002- CA-INV-Work in Progress at Production).
 
As at the year end (31st March 2020) mentioned account has a balance of USD 1,430,630.78. From the audit perspective they are in doubt of identifying a negative balances of USD 189,251.61 (which comprise in 1,430,630.78) in the financial statements in the financial year 2019/20. Major reason for such is to identifying a finished good at an estimate  value which will not be 100% accurate against actual cost of the respective shop order.
 
For example :- 
•    Actual Cost '<' Estimated Cost = WIP Credit Balance (Negative Value)
•    Actual Cost '>' Estimate Cost   = WIP Debit Balance (Positive Value)

So following elements should be explained.
•    How the system identify WIP credit Balance?
•    How the system identify WIP debit balance with respect to zero quantity/minus quantity ?
•    How the system identify WIP value without physical quantity?
•    How the system identify WIP value with minus inventory?
•    How the system identify WIP value in close shop orders?
•    How the system identify WIP value against the shop order quantity?

The answers to those questions depend on the costing method you are using. It would seem you are on standard costing.

 

I am not really sure what you are asking. But WIP/Shop orders are normally valued at the actual cost issued to the shop order. Materials/Labor/Overhead posted, based on the setup rules, labor classes, work center costs, etc. In theory if you run the standard IFS shop order report at month end, that report should tie to the G/L balance. Generally one account. If setup is done properly, it should, and needs to. 

 

The only system issue I have encountered here is that as far as I know, there is no way to run these shop order reports with historical data. Some of our companies work night shifts, so, it is nearly impossible to get the G/L balance to sync up exactly with a clean month end. I normally let this ride, until the month end falls on an off day and makes sure it ties. I always check the balance. I’ve never come across a issue that was not user related.

 

The shop order actuals versus standard variance are not posted until the shop order is closed. At that point the system compares the standard to the actual costs. The estimate is not used as far I can remember, except for information purposes. 

We want to use standard practice where the lead-time offset is not affected by Requesting an explanation of standard WIP identification process in IFS.

We want to use standard practice where the lead-time offset is not affected by Requesting an explanation of standard WIP identification process in IFS.  MyBalanceNow

Requesting an explanation of standard WIP identification process in IFS ... How the system identify WIP debit balance with respect to zero

 

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