Construction
WIP Write-Down — Onerous Contract
Reducing the WIP balance when a project is confirmed as loss-making and the WIP value exceeds recoverable amount.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Loss on Onerous Contract | Expense (+) | 180,000.00 | - |
| Work-in-Progress (WIP) | Asset (-) | - | 180,000.00 |
💡 Accountant's Note
When WIP costs exceed the remaining revenue to be earned, the excess cannot remain as an asset. It must be written down immediately under the prudence principle (IAS 37).
Professional Excel Template
Get the automated version of this entry. Includes built-in IFRS checks, VAT calculators, and SAP-ready upload formats.
QA
Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.