Search within this section
Select a section below and enter your search term, or to search all click Inventory Guide
Favorited Content
Usually an inventoriable cost |
Not usually an inventoriable cost |
|
Cost of indirect materials and supplies |
X |
|
Tools and equipment used in production but not capitalized
|
X |
|
Costs of quality control and inspection |
X |
|
Costs attributable to rework labor, scrap, and spoilage |
X |
|
Losses from casualty or theft |
X |
|
Distribution and warehousing costs (finished goods) |
X |
|
Vendor rebates and other credits (1) |
(2) |
(2) |
Depreciation for assets related to or necessary for production or manufacturing |
X |
|
Cost depletion (except depletion on intercompany sales)
|
X |
|
Repairs and maintenance of production equipment |
X |
|
Utilities |
X |
|
Rent |
X |
|
Bidding costs |
X |
|
Engineering and design expense (to the extent not research and development) |
(3) |
(3) |
Research and development expenses |
X |
|
Factory administrative expenses |
X |
|
Insurance related to production |
X |
|
Marketing, advertising, and selling expenses |
X |
|
Indirect labor and supervisory wages related to production, including basic compensation, overtime pay, vacation and holiday pay, and payroll taxes |
X |
|
General and administrative expenses attributable to business activities as a whole (i.e., not directly or indirectly related to manufacturing, retailing, or wholesaling operations) such as costs of recruiting, billing, and accounts receivable |
X |
|
Officers' salaries related to business activity as a whole |
X |
|
Officers' salaries related to production |
(4) |
(4) |
Pension cost representing current service costs (4) |
X |
|
Pension contributions to multi-employer plans (4) |
X |
|
Profit-sharing contributions (4) |
X |
|
Other employee benefit costs, including worker's compensation expenses, payments under wage continuation plans, amounts includable in income of an employee under nonqualified pension, profit-sharing and stock bonus plans, premiums on life and health insurance, incentive compensation and miscellaneous employee benefits (4) (5) |
X |
|
Taxes allowable as a deduction under Section 164, excluding state, local, and foreign income taxes |
X |
|
Income taxes attributable to income received on sale of inventory |
X |
|
Notes:
(1) Consideration should be given to the impact of applying authoritative guidance, including ASC 705-20, Costs of sales and services – Accounting for consideration received from a vendor.
(2) Individual facts and circumstances should be considered to determine if these costs are capitalizable. For example, capitalization of such costs are not unusual in certain retail businesses.
(3) Individual facts and circumstances should be considered to determine if these costs are capitalizable based on whether the costs are research and development expenses. Officers' salaries related to production are included or excluded depending on the nature of the business and/or how specifically officers' duties can be identified as being directly related to the production effort.
(4) Applies to employees involved in or necessary for production or manufacturing operations. Pursuant to ASC 715-20-45-3A, only the service costs component of net periodic benefit expense is eligible for capitalization as part of the cost of inventories.
(5) Certain elements, such as recreational facilities for employees or expenses in support of recreation and similar costs, are frequently not capitalizable.
|
PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
Select a section below and enter your search term, or to search all click Inventory Guide