# professional.wip-valuation

The value of a firm's unbilled time, its work in progress (WIP), from time
entries with an hourly cost and an hourly charge-out rate each.

- `cost` values the time at what it cost the firm (the fee earner's cost
  rate), the prudent figure for a balance sheet.
- `charge-out` values it at what the client would be billed at standard rates,
  the figure for lock-up and billing forecasts.

Each entry is valued as minutes x hourly rate / 60, rounded half-up to the
minor unit **per entry**, and the entries are added. That is how the same time
would appear on a bill, so the WIP figure reconciles with the bill it becomes;
rounding only the total gives a different answer (two 7-minute entries at
GBP 100 an hour are 11.67 each, 23.34, not 23.33).

The write-down (the part of the time the firm does not expect to recover, from
experience or a partner's review) is a rate in basis points applied once to
the gross, rounded half-up, and the net is gross less write-down, so the three
always add up exactly.

Which basis, write-down and accounting treatment are right for a set of
accounts (for UK firms, FRS 102 section 23 revenue on service contracts, which
often values unbilled time at its recoverable amount) is a matter for the
firm's accountants; this does the arithmetic consistently for whichever basis
they choose. Rates are hourly and in one currency, named by the `currency`
argument so that an empty list values at zero rather than failing.