Inventory Accounting Policy
Inventories of finished products, intermediate products, raw materials, and materials and supplies are valued at the lower of cost and net realizable value. Costs, allocated to inventory using the weighted average cost method, include direct acquisition costs, direct costs related to the units of production and a systematic allocation of fixed and variable production overhead, as applicable. Net realizable value for finished products, intermediate products and raw materials is generally considered to be the selling price of the finished product in the ordinary course of business less the estimated costs of completion and estimated costs to make the sale. In certain circumstances, particularly pertaining to Potash Corp.'s materials and supplies inventories, replacement cost is considered to be the best available measure of net realizable value. Inventory is reviewed monthly to ensure the carrying value does not exceed net realizable value. If so, a writedown is recognized. The writedown may be reversed if the circumstances which caused it no longer exist.
Source: Potash Corp. of Saskatchewan Inc., Annual Report
Inventory Disclosure
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Potash Corp. of Saskatchewan Inc., Statement of Financial Position, Inventory
Source: Based on data from Potash Corp. of Saskatchewan Inc. Annual Reports
| Item |
Description |
The company |
| Finished products |
Carrying amount as of the balance sheet date of merchandise or goods held by the company that are readily available for sale. |
Potash Corp. of Saskatchewan Inc.'s finished products declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level.
|
| Intermediate products |
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. |
Potash Corp. of Saskatchewan Inc.'s intermediate products declined from 2009 to 2010 and from 2010 to 2011.
|
| 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. |
Potash Corp. of Saskatchewan Inc.'s raw materials increased from 2009 to 2010 and from 2010 to 2011.
|
| Materials and supplies |
Carrying amount as of the balance sheet date of products used directly or indirectly in the manufacturing or production process, which may or may not become part of the final product. May also include items used in the storage, presentation or transportation of physical goods. |
Potash Corp. of Saskatchewan Inc.'s materials and supplies increased from 2009 to 2010 and from 2010 to 2011.
|
| Inventories |
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). |
Potash Corp. of Saskatchewan Inc.'s inventories declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level.
|
