1. INVENTORY

2. UN system organizations with a supply component for programming or that sell goods to raise funds, may hold inventory. Inventories are materials that are: Consumed or distributed in the course of programming Held for sale; or Are held or are in the production process for sale or distribution UNICEF/NYHQ2007-1911/Noorani UNICEF/NYHQ2009-0884/Sokol UNICEF/NYHQ2008-0699/Volpe

3. Inventory or Expense? Record as INVENTORY When a UN organisationcontrols the goods Example: Programme supplies have been received from a supplier and are held for future humanitarian aid where the UN organisation controls the decisions around the use and release of the supplies. Example: paper and printing supplies held for production Record as EXPENSE When control is transferred (e.g. decision making is transferred to a government or implementing partner, supplies are distributed, or supplies are sold) When supplies become damaged or obsolete (e.g. perishable supplies) Inventory can be recorded as an asset or an expense

4. Valuing Inventory COST For programme supplies distributed for free or at a nominal charge - All costs of purchase and transportation to current location For supplies consumed in the production process – include also the cost of production (conversion) Recorded at lower of cost, net realizable value or fair value Recorded at lower of cost, net realizable value or fair value NET REALIZABLE VALUE Where supplies are damaged or obsolete or selling price has declined COST is reduced to: - For supplies to be distributed for free: replacement cost - For supplies to be used in production: amount that may be recovered through sale FAIR VALUE Where supplies are donated to a UN organisation free of charge - Amount that the goods could be exchanged for if transacting with a third party - As at date supplies are acquired by the UN organisation

5. Differences: UNSAS to IPSAS Presentation. UNSAS does not specifically reference how inventory should be presented Recognition: inventory is recognised when it is owned by an organisation. Derecognition is not defined but is presumed to be required when inventory is no longer owned by an organisation Measurement: Standard method of measurement is cost – however the specifics of what is included in cost is not defined. Presentation: Inventory is included on the face of the Statement of Financial Position. Information is presented in the notes. Recognition. Inventory is recognized as an asset – at the date acquired - where a UN Organisation controls the inventory Derecognition. Inventory is expensed when consumed, or when control is passed onwards, such as distribution or sale of supplies Measurement. Supplies to be distributed or sold are reported at the lower of cost, replacement cost or recoverable cost. Supplies donated to a UN organisation are recorded at fair value UNSAS IPSAS