ASC 330 Inventory

This Topic provides guidance on the accounting and reporting of inventory in the financial statements.

You must log in to view this content and have a subscription package that includes this content.

Required subscriptions

US GAAP

10 Overall 905 Agriculture 908 Airlines 910 Contractors—Construction 912 Contractors—Federal Government 926 Entertainment—Films 930 Extractive Activities—Mining 932 Extractive Activities—Oil and Gas 976 Real Estate—Retail Land 978 Real Estate—Time-Sharing Activities 985 Software

Deloitte Guidance — Overall

ASC 330 provides guidance on the accounting and reporting of inventory in the financial statements. ASC 330-10 notes the following concerning inventory balances:

An inventory has financial significance because revenues may be obtained from its sale, or from the sale of the goods or services in the production of which it is used. Normally such revenues arise in a continuous repetitive process or cycle of operations in which goods are acquired, created, and sold, and further goods are acquired for additional sales.

Thus, the inventory at any given date is the balance of costs applicable to goods on hand remaining after the matching of absorbed costs with concurrent revenues. This balance is appropriately carried to future periods provided it does not exceed an amount properly chargeable against the revenues expected to be obtained from ultimate disposition of the goods carried forward. In practice, this balance is determined by the process of pricing the articles included in the inventory.