企业会计准则存货英文财政部

Accounting Standard for Business Enterprises

No.1—Inventories

Chapter 1 General Provisions

Article 1 This Standard is formulated in accordance with the "Accounting Standard for Bussiness Enterprise—Basic Standard"for the purpose of prescribing the recognition and measurement of inventories and the disclosure of related information.

Article 2The following items are dealtwith under other appropriate Accounting Standards:

(a)consumable biological assets, which are dealt with under "Accounting Standard for Bussiness Enterprise No.5—Biological Assets.

(b)costs of inventories aggregated under construction contracts, which are dealt with under"Accounting Standard for Business Enterprises No. 15—Construction Contracts".

Chapter 2 Recognition

Article 3Inventories are finished goods or merchandise held by an enterprise for sale in the ordinary course of business,or work in progress in the process of production for such sale, or materials or be consumed in the production process or in the rending of services.

Article 4 Inventories shall be recognized only when both of the following conditions are satisfied:

(a)it is probable that economic benefits associated with the inventories will flow to the enterprise.

(b)the cost of the inventories can be measured reliably.

Chapter 3 Measurement

Article 5Inventories shall be initially measures at cost.Cost of inventories comprises all costs of purchase,cost of conversion and other costs.

Article 6The cost of purchase of invetories comprise the purchase price,related taxes and transport,handing,insurance and other costs attributable to the acquisition of inventories.

Article 7 The cost of conversion of inventories include direct labor costs and the allocation of production overheads based on a particular method. Production overheads are indirect costs incurred for the production of goods and for the rendering of services. An enterprise shall reasonably determin the allocation method of production overheads according to the nature of those overheads.

If two or more products are produced simultaneously in a production process and the costs of conversion of each product are not separately idetifiable, such costs of conversion shall be allocated btween the

products on a rational basis.

Article 8Other cost of inventories are other expenditures incurred in bring the inventories to their present location and condition other than costs of purchase and costs of conversion.

Article 9The following costs shall be charged to profit or loss in the period in which they are incurred and excluded from the cost of inventories:

(a)abnormal wastage of direct materials, direct labor and production overheads.

(b)storage costs(unless those costs are necessary in the production process befors a future production stage).

(c)other expenditures that do not contribute to bringing inventories to their present location and condition.

Article 10Borrowing costs that shall be included in the cost of inventories are accounted for in accordance with "Accounting Standard for Business Enterprises No.17—Borrowing Costs".

Article 11The cost of inventories contributed by an investor shall be determined according to the value stipulated in the investment contract or agreement, except where the value stipulated in the contract or agreement is not fair.

Article 12 Cost of agricultural produce at the point of havest, and the cost of inventories obtained through an exchange of non-Monetary assets, a debt restructuring transaction or a business combination shall be determined in accordance with "Accounting Standard for Business Enterprises No.5—Biological Assets","Accounting Standard for Business Enterprises No.7—Exchange of Non-Monetary Assets","Accounting Standard for Business Enterprises No.12—Debt Restructurings" and "Accounting Standard for Business Enterprises No.20—Business Combinations" respectively.

Article 13For an enterprise which is a service provider, cost of inventories comprises the direct labor cost of personnel engaged in providing the service, other direct costs and attributable overheads. Article 14An enterprise shall use the first-in-first-out method, the weighted average method or the specific identification method to assign the actual cost of inventories transferred out.

For inventories having a similar nature and use, the same method shall be used to assign the cost of inventories.

The cost of inventories of items that are not ordinarily interchangeable and goods or services produced and segregated for specific projects are generally assigned by using the specific identification method.

When inventories are sold, their cost shall be charged to profit or loss for the current period, and any provision for decline in value related to the invengtories sold shall be reversed.