BP PLC (BP) | Analysis of Inventory

Inventory Accounting Policy

Inventories, other than inventory held for trading purposes, are stated at the lower of cost and net realizable value. Cost is determined by the first-in first-out method and comprises direct purchase costs, cost of production, transportation and manufacturing expenses. Net realizable value is determined by reference to prices existing at the balance sheet date.

Inventories held for trading purposes are stated at fair value less costs to sell and any changes in net realizable value are recognized in the income statement.

Supplies are valued at cost to BP mainly using the average method or net realizable value, whichever is the lower.

Source: BP PLC, Annual Report

Inventory Disclosure

BP PLC, Statement of Financial Position, Inventory

Source: Based on data from BP PLC Annual Reports

Item	Description	The company
Crude oil	Carrying amount as of the balance sheet date of finished goods inventories for petroleum products, crude oil, petrochemical products, and other oil and gas inventories.	BP PLC's crude oil increased from 2009 to 2010 but then slightly declined from 2010 to 2011.
Natural gas	Carrying amount as of the balance sheet date of liquid hydrocarbon components recovered from natural gas.	BP PLC's natural gas increased from 2009 to 2010 and from 2010 to 2011.
Refined petroleum and petrochemical products	Carrying amount as of the balance sheet date of petroleum or crude oil.	BP PLC's refined petroleum and petrochemical products increased from 2009 to 2010 and from 2010 to 2011.
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.	BP PLC's 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).	BP PLC's inventories increased from 2009 to 2010 but then slightly declined from 2010 to 2011.