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Your First Year Reporting WIP: Different Presentations

Updated: Jan 16


So, you’ve decided to prepare a WIP schedule this year and to make all the necessary journal entries. That’s great!

I typically see two styles of presentation here:



  1. Single year presentation of only a balance sheet, WIP schedule, and closed jobs listing (Ideal Scenario):

  2. Your balance sheet will present your Over/Underbillings which is crucial for sureties.

  3. You will only present ending retained earnings, so you won’t have to worry about prior year WIP. If you had to provide an income statement, it would be misstated because you only began recording WIP in the current year for jobs that overlapped from last year.

  4. The closed job listing will only show the total contract price less total cost. No distinction will be made between what was earned or incurred in the current year. This is easier to present.  

  5. No cash flow statement because you did not record WIP in the prior year.



  1. Single year presentation of the full set of financial statements:  

  2. The surety may ask for a full set of financial statements which includes, a balance sheet, statement of income and retained earnings, cash flow statement and footnotes.

  3. Reporting the statement of income and retained earnings and cash flow statement will likely require prior period adjustments to recognize WIP in the prior year. Why?

                    i.      The statement of income and retained earnings presents beginning retained earnings. Without recording WIP in the prior period, this balance would be misstated as you either recognized too much or too little revenue which ultimately flowed through retained earnings.  

                              ii.      The statement of income and retained earnings presents net income. Your current year income would be misstated if you recorded two- or three-years’ worth of WIP in the current year.

                              iii.      The cash flow statement (indirect method) requires accurate beginning balance sheet balances. Without WIP in prior year, your beginning balances are off.  


Hope that helps! If not, feel free to reach out! Thanks!



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