Work in process

Definition and explanation

At the end of any financial period there are certain goods in every manufacturing concern that have been partially processed so that they cannot be called raw material anymore. But at the same time they are not fully processed and cannot be called finished goods either.

Such goods are called Work in Process or unfinished goods. If the production cycle of a factory is relatively short, the value of work in progress at the end of the year may be small and can be safely ignored when prepared the Manufacturing Statement.

However, certain large-scale factories have considerably long production cycles and at any given moment the value of their work in progress adds up to a large amount. This should then be properly accounted for in the Manufacturing Statement.


It is important to note that the issue of recognizing work in progress arises twice in a financial year: at the beginning and end of it. There is generally no question of purchase or sale of work in process.

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