Inventory Accounting Policy
Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out method, the weighted-average cost method, or in certain circumstances (for example, where the completed-contract method of revenue recognition is used) the specific identification method. Inventoried costs are stated at acquisition cost or actual production cost, including direct material and labor and applicable manufacturing overheads. Adjustments to reduce the cost of inventory to its net market value are made, if required, for decreases in sales prices, obsolescence or similar reductions in the estimated net realizable value.
Source: ABB Ltd., Annual Report
Inventory Disclosure
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ABB Ltd., Statement of Financial Position, Inventory
Source: Based on data from ABB Ltd. Annual Reports
| Item |
Description |
The company |
| Raw materials |
Carrying amount as of the balance sheet date of unprocessed items to be consumed in the manufacturing or production process. Also includes purchased parts that will be used as components of a finished product. |
ABB Ltd.'s raw materials increased from 2009 to 2010 and from 2010 to 2011.
|
| Work in process |
Carrying amount as of the balance sheet date of merchandise or goods which are partially completed, are generally comprised of raw materials, labor and factory overhead costs, and which require further materials, labor and overhead to be converted into finished goods, and which generally require the use of estimates to determine percentage complete and pricing. |
ABB Ltd.'s work in process declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level.
|
| Finished goods |
Carrying amount as of the balance sheet date of merchandise or goods held by the company that are readily available for sale. |
ABB Ltd.'s finished goods increased from 2009 to 2010 and from 2010 to 2011.
|
| Inventories, net |
Carrying amount (lower of cost or market) as of the balance sheet date of inventories less all valuation and other allowances. Excludes noncurrent inventory balances (expected to remain on hand past one year or one operating cycle, if longer). |
ABB Ltd.'s inventories, net increased from 2009 to 2010 and from 2010 to 2011.
|
