Manufacturing accounting.
Cost to the unit.

Most manufacturers use standard or absorption costing, allocating production overheads to units through defined cost centres — which is also what IAS 2 expects for inventory valuation. The real test is whether the overhead allocation is defensible at audit. We set up job and process costing with overhead absorption that stands up to that scrutiny.

All three inventory categories are valued under IAS 2 at the lower of cost and net realisable value, with cost building up through the production process: materials, direct labour and absorbed production overheads. Each stage needs its own valuation workings. We maintain raw-material, WIP and finished-goods valuations as part of manufacturing bookkeeping.

Generally yes — input VAT on machinery, raw materials and production costs is recoverable where the purchases are used to make taxable supplies, subject to the normal documentation rules. Recovery gets harder if some output is exempt or out of scope. Our VAT compliance service manages input recovery and return filing for manufacturers.

A fixed asset register ties plant and machinery on the floor to the ledger — recording cost, location, depreciation and impairment indicators for every asset. It underpins the depreciation in your Corporate Tax computation and is one of the first things auditors test. Our fixed asset tagging service physically verifies assets and reconstructs the register.