# Manufacturing & Industrials Inventory, fixed assets, working capital, and multi-entity groups with tender and export exposure. In manufacturing, the balance sheet decides how much of the reported profit is real. Manufacturing groups carry their complexity on the balance sheet: inventory valued at every stage of production, capital-intensive assets with long lives, receivables from government and large customers on extended terms, and group structures that grew one plant or one joint venture at a time. We work with manufacturers on the valuation, control, and audit questions that gather there, and on the finance processes that keep a multi-entity group’s numbers reliable through the year. ## On the agenda Inventory ### Inventory values the cost records cannot support IAS 2 (Ind AS 2) requires fixed production overheads to be allocated on normal capacity, with abnormal waste and unallocated overheads expensed as incurred. Many companies still use standard costs that have not been reconciled to actuals for years, or absorb overheads on actual output when volumes fall, which inflates inventory at exactly the moment the business is weakest. Net realisable value testing of slow-moving stock often becomes a year-end formality. Differences on physical verification, work-in-progress estimates, and goods in transit at the cut-off are where **audit adjustments tend to cluster**. Fixed assets ### Component accounting, and capital work-in-progress that never closes IAS 16 (Ind AS 16) requires significant parts with different useful lives to be depreciated separately, and Schedule II to the Companies Act calls for disclosure where useful lives differ from its indicative lives. Meanwhile, capital work-in-progress keeps absorbing borrowing costs and project overheads long after assets are ready for use. A **capitalisation review at each quarter end**, supported by a register of assets available for use, prevents most of the year-end restatements we see. Receivables ### Tender receivables, retention money, and credit loss Government and public-sector customers pay on long cycles, with retentions and performance guarantees attached. A credit loss model that treats these balances like ordinary trade receivables, or ignores the time value of retention money held for years, misstates both the provision and the revenue. Liquidated damages clauses are variable consideration under IFRS 15 and belong in the revenue estimate. They should not wait for a provision booked on the day the penalty is levied. Group ### Multi-entity groups and related party flows Contract manufacturing between group companies, shared plants, and joint ventures all create related party transactions that need arm’s length support under the Companies Act and, above the thresholds, transfer pricing documentation. Consolidation depends on classifying joint arrangements correctly under IFRS 11 (Ind AS 111). A joint operation and a joint venture produce very different financial statements from the same plant. ## How we help [Audit, Assurance & Transaction Support · Audit readiness for multi-entity groups, internal financial controls, and internal audit of plants.](https://soniassociates.in/service-audit) [Finance Function Transformation · Inventory and cash controls, faster closes, and group finance operations.](https://soniassociates.in/service-finance-transformation) [Financial Reporting & Technical Accounting · Inventory costing, component accounting, and consolidation of joint arrangements.](https://soniassociates.in/service-financial-reporting) [Performance Management & Analytics · Product, plant, and customer profitability on allocations that hold up, and demand forecasts built with machine learning.](https://soniassociates.in/service-analytics) ## Examples of our work [All client impact](https://soniassociates.in/case-studies) Manufacturing · Audit & Assurance ### [Turning chronic audit delays into on-time delivery for a seven-entity manufacturing group](https://soniassociates.in/case-audit-readiness-manufacturing-group) 7 Legal entities brought onto one readiness calendar Diversified group · Financial Reporting ### [Consolidating a thirteen-entity group through a mid-year sale of a majority stake](https://soniassociates.in/case-consolidation-thirteen-entity-group) 13 Entities consolidated, including subsidiaries and associates ## Featured insights [All insights](https://soniassociates.in/insights) Article · The Audit-Ready Company ### [The month-end close as a design problem](https://soniassociates.in/insight-month-end-close) June 24, 2026 · 9 min read Article · The Audit-Ready Company ### [The audit trail requirement is a control, not a software setting](https://soniassociates.in/insight-audit-trail-edit-log) August 26, 2026 · 10 min read Article · The Audit-Ready Company ### [The judgements auditors test in an expected credit loss model](https://soniassociates.in/insight-ecl-models-audit-scrutiny) June 10, 2026 · 11 min read ## Talk to us about manufacturing We work with a small number of clients in each sector, which keeps senior attention where it belongs. [Contact us](https://soniassociates.in/contact) [LinkedIn](https://www.linkedin.com/in/in-aditya/) --- Soni Aditya & Associates, Chartered Accountants. Office No 502, Unit 507, 5th Floor, 45 Baner Street, Baner, Pune, Maharashtra 411045, India. aditya@soniassociates.in · +91 93400 75288 · https://soniassociates.in/contact This website is published for general information, in keeping with the guidelines of the Institute of Chartered Accountants of India on members’ websites. It does not advertise or solicit work, and nothing on it is professional advice. Publications reflect the law and standards at the date they were written, so please take advice on your own facts before acting. Client engagements described here are anonymised. Site index for agents: https://soniassociates.in/llms.txt Canonical page: https://soniassociates.in/industry-manufacturing