Chapter VI

Inventories



The BT shall act as the Property Officer of the barangay and shall be responsible for the receipt, custody, issuance and physical inventory of barangay supplies and inventories.

Inventories are assets: (a) in the form of materials or supplies to be consumed in the production process; (b) in the form of materials or supplies to be consumed or distributed in the rendering of services; (c) held for sale or distribution in the ordinary course of operations; or (d) in the process of production for sale or distribution.

Inventories in the public sector may include:

a. Ammunition;
b. Consumable stores;
c. Maintenance materials;
d. Spare parts for plant and equipment, other than those dealt with in standards on Property, Plant and Equipment;
e. Strategic stockpiles (for example, energy reserves);
f. Stocks of unissued currency;
g. Postal service supplies held for sale (for example, stamps);
h. Work-in-progress, including:

i. Educational/training course materials; and
ii. Client services (for example, auditing services), where those services are sold at arm's length prices; and

i. Land/property held for sale.

6.1 Specific Policies

6.1.1 Inventories for sale shall be classified as merchandise inventory.

6.1.2 Inventories shall be measured at the lower of cost and net realizable value, except where section 6.1.2 or section 6.1.3 applies.

6.1.3 Where inventories are acquired through a non-exchange transaction, their cost shall be measured at their fair value as at the date of acquisition.

6.1.4 Inventories shall be measured at the lower of cost and current replacement cost where they are held for:

a. Distribution at no charge or for a nominal charge; or
b. Consumption in the production process of goods to be distributed at no charge or for a nominal charge.



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