Semi-finished product ( semi-finished product , work in progress, finished goods and services ) is in the production management and accounting the term for not completely finished products , which later finished products processed are.
The status of unfinished goods is due to the fact that production processes cannot always be completed by the balance sheet date . The balance sheet date represents an artificial turning point for the production process. The unfinished products on the balance sheet date must first be put into stock in their unfinished status and produced after the balance sheet date. This is due to the accruals and deferrals with its principle of accrual . Economically finished products have the status of raw materials , consumables and supplies (RHB) already passed through the first stages of production, but the state of the market has not yet reached.
A distinction must be made between semi-finished goods and intermediate goods and workpieces which later become an essential part of an end product ( semi-finished products , blanks ). These precursors are regarded as finished products in companies pre-production ( suppliers ) because the underlying activity provides only for the production of a precursor. For automotive suppliers , for example, the fender is considered an end product, but for automotive manufacturers it is used as a preliminary product in car production.
According to HGB , semi-finished products are to be accounted for as “work in progress, work in progress” on the assets side of the balance sheet under current assets . Legislators require a separate balance sheet item from finished products because the manufacturing costs of unfinished products are significantly lower than the market value of finished products. In the income statement, on the other hand, finished and semi-finished products are combined in the event of changes in inventory ( (2) No. 2 HGB).para. 2 no. BI 2
It is questionable whether semi-finished products fall under the scope of the Product Safety Act (ProdSG). The ProdSG applies “if products are made available on the market, exhibited or used for the first time in the course of a business activity” ( (1) ProdSG). In any case, according to No. 27 ProdSG, products are only "ready for use when they can be used as intended without the need to insert additional parts". This also implicitly includes semi-finished products, which are therefore not considered ready for use.
In particular, companies with long production times such as the construction industry , plant construction , aircraft construction or shipbuilding have a high proportion of unfinished products in their balance sheets. These production times can even last over several balance sheet dates. Affected companies possess because of high capital tie a large capital needs , they typically whole or in part by customer loans ( advance payments , advance payments , progress payments finance). The warehouses are mostly separated into warehouses for RHB, semi-finished products and end products. The manufacturing costs of semi-finished products manufactured in-house are usually pre-calculated using an annual standard cost rate. In the recalculation , the actual manufacturing costs are then measured against the standard costs and can thus be examined more closely using a deviation analysis. If semi-finished products are delivered abroad in order to be produced there and then re-imported , one speaks of an outward processing trade .
Semi-finished goods are also called intermediate goods if they are further processed into an end product in another company . As an automobile manufacturer applies for example in the context of foreign manufacturing tires by the tire manufacturer and builds them as part of the in-house production in the automotive one. For the tire manufacturer, the car tires are a finished product; from the car manufacturer's point of view, they are a semi-finished product.