UK Change in Stocks of finished goods and work in progress

[PaulWilliams1440]

Hi All,

In the consolidated P&L, Operating charges, I am trying to reconcile the change in stocks of finished goods and work in progress (essentially CoS) to the movement in the relevant stock on the balance sheet and not having a lot of success.

I have the standard CoS gl's including some retro, rebate type gl's that I know will not be included in the stock change in the b/s because all the stock is valued at standard cost. Am I missing a trick here? Should this relationship be reconcilable?

Thanks for your help.

Paul

 

[Counterofbeans]

Is inventory valued at standard costs or actual costs? If standard, then I hope standard approximates actual, yes?

Typically, you'll see variance accounts in the G/L, which then get capitalized into inventory via a relationship between the total of all variances vs. what's been sold/what's in inventory.

The reason I bring this up is because that mess needs to get untangled before you can even attempt to reconcile changes on the balance sheet vs. charges into the P&L. Generally, standard cost changes, especially if they have their own P&L accounts, can be reconciled without too much grief.

 

[PaulWilliams1440]

Many thanks for your reply. I had reached the same conclusion. There are a number of GL's within the CoS range that would not be reflected in the stock movement. Such as retro receivable, commission payable etc. We value stocks at standard cost and any variance gets taken though specific GL's; PPV for example. This makes reconciling the movement quite tricky but at least I have a clearer path now. Thanks for your help.