WIP cost update is a transaction that occurs when the component issued to a job and after that the component cost is changed through a standard cost update.. When the component cost is increased, the WIP Value has to be increased.. This increase happens through the WIP cost update transaction where the IWP Valuation is debited and the adjustment account given in the standard cost update is credited..

Same way when the assembly is completed and after that the assembly cost is changed that time also this transaction occurs..

If you are looking for step, you can try this to understand it better:

1. Create a comp 'c-1' and assign a frozen cost of 10.
2. Create an assembly 'a-1' and create a BOM with 'c-1' as component with supply type as 'Push'.
3. Do cost rollup for 'a-1' followed by standard cost update
4. Do a misc receipt of 10 qtys for 'c-1'
5. Create a job 'j-1' for 5 qtys for 'a-1'
6. Do WIP Component issue for 'c-1' for 5 qtys.. The WIP Value would not be 3*10 = 30
7. Change the pending cost of 'c-1' to 11 and do a standard cost update to change the frozen cost to 11
8. WIP Adjustment report would have got spawned.. The value change would have been 3 which would be in the form. of 'WIP Cost Update' for the job.
9. Now see the WIP Value.. It would be 3*11 = 33