.Analysis of Inventory
Difficulty: Advanced
Inventory Accounting Policy
Inventories are stated at the lower of cost or market, with cost generally determined on a first-in, first-out basis.
Source: 3M Co., Annual Report
Inventory Disclosure
3M Co., Statement of Financial Position, Inventory
USD $ in millions
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| | Finished goods | |||||
| | Work in process | |||||
| | Raw materials and supplies | |||||
| | Inventories |
Source: Based on data from 3M Co. Annual Reports
| Item | Description | The company |
|---|---|---|
| Finished goods | Carrying amount as of the balance sheet date of merchandise or goods held by the company that are readily available for sale. | 3M Co.'s finished goods declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level. |
| 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. | 3M Co.'s work in process increased from 2015 to 2016 and from 2016 to 2017. |
| Raw materials and supplies | Aggregated amount of unprocessed materials to be used in manufacturing or production process and supplies that will be consumed. | 3M Co.'s raw materials and supplies declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level. |
| 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). | 3M Co.'s inventories declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level. |
