inventory profit

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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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CRISIL also believes that the company's cash accruals in 2010-11 will improve, driven by the expected inventory profits due to the increase in cotton prices.
(11.) 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.
Rising prices allow most retailers to pad margins and add to inventory profits. At the very least, rising prices add to the top line and take some of the pressure off of the need for more productivity growth as a booster to profitability.
Rising prices allow most retailers to pad margins and add to inventory profits. At the very least, rising prices add to the top line and decrease the need for more productivity growth as a booster to profitability.
The main advantage of using the LIFO method of accounting for inventory costs is to eliminate "inventory profits" in periods of rising costs.
Accounting corrections are used to remove inventory profits (line 2) and put depreciation on the replacement-cost basis (line 3).
Management says that the declines in the segment's operating profits before the special charges largely reflected the slowdown in drug price increases, which reduced the company's ability to benefit from inventory profits.
Companies that use LIFO to minimize the taxation of illusory inventory profits should never forget that LIFO can turn around and bite them when inventory levels decline.
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.
(14.) As prices change, companies that value inventory withdrawals at original acquisition (historical) costs may realize inventory profits or losses.
The IVA removes inventory profits and losses from business income.(10) In the third quarter, inventory profits amounted to $26.7 billion, up from $13.6 billion in the second quarter.

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