By Hyrum Davis, CPA, Manager, Assurance & Advisory
ASL Construction Group
When it comes to construction accounting, a good healthy work in progress (WIP) schedule rules the day. A WIP schedule is designed to match costs with revenue and smooth out reported gross profits, in addition to bringing financial statements in conformity with US GAAP. A healthy WIP schedule gives users important information to help them understand and analyze job performance. However, a lot of this information is based on estimates and the WIP schedule is only as good as the estimated information going into it. This begs the question, what are key indications that inputs of a WIP schedule may be incorrect? Here are some things to consider: (more…)