Work in progress (WIP) in a professional services context is the value of work performed by fee earners but not yet invoiced to clients. WIP is a current asset on the practice balance sheet and is included in the working capital adjustment in a sale of business, with the methodology for valuing WIP often heavily negotiated.
The recurring contested points in WIP valuation are: the percentage of nominal WIP that is realistically billable and collectible; whether WIP older than a defined period (typically 90 or 180 days) is excluded; and whether disputed or written-off WIP is included.