t1obrien A fundamental base of accounting rules is PRUDENCE. Of...

t1obrien

A fundamental base of accounting rules is PRUDENCE. Of course it is right to value prudently. Odd not to.

But you say "To treat WIP as profit". Nobody has aver said that ever anywhere, WIP of value at beginning and end of a period together with sales make up accounting sales. I assume you are just bad at english or dont understand a P/L account.

To overstate the value of WIP would be criminal or stupid or misleading . The fact is that in a firm like SGS with long established motor claims processing experience then case categorisation makes the separate categories pretty generic. Thus you can apply statistical method to prove, within 95% confidence, what proportion of cases will succeed based on past success rates per segment. So it is possible to value WIP with accuracy and write off as a cost the % is accurately ( to within 95%) not expected to succeed.

The new SSAP seems to be designed for instances when there is NOT predictability of outcome as must apply in much of the legal profession. Predictability IS possible in SGS which is only quasi legal. WIP in SGS should be full and accurately vakued based on proof provided by statistics,

Mel