How to Record Silicon and Precious Metal Scrap Recovery
Accounting for the value recovered from defective wafers or manufacturing byproduct (e.g., gold/copper/silicon recycling).
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Other Receivables - Scrap Vendor | Asset (+) | 5,000.00 | - |
| Cost of Goods Sold - Scrap Credit | Expense (-) | - | 5,000.00 |
💡 Accountant's Note
Semi-fab produces high-value waste. Defective wafers and the 'slurry' from polishing contains silicon and sometimes gold or copper. Large Fabs have contracts with reclaimers. Under GAAP, the value received for scrap is typically recorded as a reduction of COGS in the period the scrap is sold.
Practitioner & Systems Framework
💻 ERP Architecture
Track scrap by weight (grams/kg). Large Fabs record 'Expected Scrap' as a standard cost credit, while smaller shops record it only upon cash receipt.
⚠️ Audit Flags
Inventory Shrinkage. If scrap revenue is high but yield loss is reported as 'Low,' there is a data integrity issue in the manufacturing reporting.
📄 Required Documentation
Scrap manifest, reclaimer's assay report (showing metal content), and the check/remittance advice.
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