NVIDIA Corp. (NVDA)
Analysis of Inventory
High level of difficulty
Accounting Policy on Inventory
Inventory cost is computed on an adjusted standard basis, which approximates actual cost on an average or first-in, first-out basis. Inventory costs consist primarily of the cost of semiconductors purchased from subcontractors, including wafer fabrication, assembly, testing and packaging, manufacturing support costs, including labor and overhead associated with such purchases, final test yield fallout, and shipping costs, as well as the cost of purchased memory products and other component parts. NVIDIA charges cost of sales for inventory provisions to write down the inventory to the lower of cost or net realizable value or to completely write off obsolete or excess inventory. Most of NVIDIA’s inventory provisions relate to the write-off of excess quantities of products, based on the inventory levels and future product purchase commitments compared to assumptions about future demand and market conditions. Once inventory has been written-off or written-down, it creates a new cost basis for the inventory that is not subsequently written-up.
Source: 10-K (filing date: 2019-02-21).
NVIDIA Corp., balance sheet: inventory
US$ in millions
|Jan 27, 2019||Jan 28, 2018||Jan 29, 2017||Jan 31, 2016||Jan 25, 2015||Jan 26, 2014|
Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-03-17), 10-K (filing date: 2015-03-12), 10-K (filing date: 2014-03-13).
|Inventories||Amount after valuation and LIFO reserves of inventory expected to be sold, or consumed within one year or operating cycle, if longer.||NVIDIA Corp.’s inventories increased from 2017 to 2018 and from 2018 to 2019.|