UITF 40

UITF 40

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We have a firm of Solicitors as clients. They have asked us for advice on valuing their WIP at the end if the year. Normal criminal and family work is fine as its time recorded, PI work isn't included as its no win no fee.

Does anyone have any suggestions with regard to conveyancing? This particular client does not use time recording for the conveyancing employees as they work on fixed fees and turnaround of work is usually within 6 weeks.

I'm thinking that time recording does need to be used in the future - but what to do previously?

Any ideas would be appreciated.

Many thanks.
Emma

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By djw090
07th Dec 2006 11:11

UTIF 40
On win no fee work is contingent on a future event that the firm does not control. Therefore no WIP should be recognised in relation to it.

With the conveyancing work you could assume that the work is done evenly over the 6 week period and use 50% of the following 6 weeks revenue. If the level of work fluctuates you might want to use a more complex formula but I am sure you get the idea.

The time recording on the fixed fee work is not required. If they do introduce it you may need to start considering the average over or under recovery rates.

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By Chris Smail
07th Dec 2006 15:38

50:50
As a rule of thumb, about half the work on conveyancing is done immediately and the rest at the last minute. So in the absence of better information I pick up half of the sales value in incomplete conveyancing work.

Quick & dirty, but consistent and unambiguous.

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