inventory profit

Inventory Profit

In accounting, the increase in value of an asset during the time it is held. Inventory profit may occur through appreciation, but it is most often the result of inflation. That is, the increase in the asset's value is usually the result of the reduction in the value of the currency. Inventory profit is typically only a minor piece of a company's total profit. See also: LIFO, FIFO.

inventory profit

Profit that results from the increase in value that assets undergo during the time they are held in inventory. Inventory profit, ordinarily due to general inflation, is not considered to be of high quality because it is incidental to the firm's main business. See also first-in, first-out, last-in, first-out.
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The use of FIFO would have triggered recognition of most of the inventory profit created by this bargain purchase.
As the shufflers were en route from Vienna on October 31, 2006 and had not yet been received in Las Vegas, the inventory was accrued at the appropriate cost as defined in our transfer pricing policy; however, the remaining inter-company inventory profit was inadvertently not eliminated.
Lower refined product margins and the absence of an $8 million after-tax LIFO inventory profit recognized in the fourth quarter of 1990 were offset by lower refinery operating expenses, higher refined product sales volumes, and lower selling, general and administrative expenses.
The IVA adjusts the NIPA estimates of business income for inventory profits or losses; the IVA is the difference between the cost of inventory withdrawals valued at acquisition cost and the cost of inventory withdrawals valued at replacement cost.
These generally favorable conditions, together with substantial inventory profits from the rising prices, produced good profit margins.
Accounting corrections are used to remove inventory profits (line 2) and put depreciation on the replacement-cost basis (line 3).
The accounting theory supporting LIFO is the belief that it provides a better matching of current costs with current revenues, thereby eliminating inventory profits from the taxpayer's earnings.
The 1992 year and fourth quarter results also included LIFO inventory profits of $49.
As prices change, companies that value inventory withdrawals at original acquisition (historical) costs may realize inventory profits or losses.
The year 1992 also included after tax LIFO inventory profits of $49.
Additionally, inventory profits (associated with price increases) should decline throughout the second half of 2006 and all of 2007.

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