| VOLUME: I |
POLICIES RELATED TO ACCOUNTING ADMINISTRATION |
| SUBJECT: |
Inventory |
| SOURCE: |
Cost Accounting Standards (CAS) 9905.501, Consistency in estimating, accumulating and reporting costs by educational institution, CAS 9905.502, Consistency in allocating costs incurred for the same purpose by educational institutions, and Chief Accountant. |
| DATE ISSUED: |
July, 1996 |
| POLICY NO.: |
I-390 |
| RATIONALE: |
The recharge center balance sheet should accurately reflect the unit's financial position at the end of the fiscal year. A physical inventory of the items maintained in inventory should be taken at least once every fiscal year. |
| POLICY: |
The recharge centers will inventory all items that were purchased for resale that have not been sold. Also, the items that were purchased for use in the production process will be inventoried. The valuation method used for recording inventory should be specific identification or average cost or First-In First-out (FIFO), or Last-in First-Out (LIFO)or Retail inventory method. This inventory value should be recorded as an asset in the University's Financial Information System. |
| DEFINITIONS: |
Purchases for resale are expenditures for products or services that will be resold. The title of the object code used should state that it is purchases for resale
Recharge center is an entity whose primary mission is to provide a good or service for the convenience of Indiana University
|
| PROCEDURE REFERENCE: |
All items that are purchased for resale should be coded with the title "purchases for resale". Any other items that are used in the final product or service should be identifiable in the university's accounting records. All of the inventory items that are purchased for resale or the items used in making the product should be counted during the physical inventory. The physical inventory should be recorded in the FIS in the fiscal period in which the inventory was counted. |
| CROSS REFERENCE: |
See Accounting Administration Policy I-350, Accrual Accounting |
| RESPONSIBLE ORGANIZATION: |
Financial Management Support |
