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Microsoft Excel LibreOffice Calc

Estée Lauder Cos. Inc. (EL)


Analysis of Inventory

Difficulty: Advanced


Inventory Accounting Policy

Inventory and promotional merchandise only includes inventory considered saleable or usable in future periods, and is stated at the lower of cost or net realizable value, with cost being based on standard cost and production variances, which approximate actual cost on the first-in, first-out method. Cost components include raw materials, componentry, direct labor and overhead (e.g., indirect labor, utilities, depreciation, purchasing, receiving, inspection and warehousing) as well as inbound freight. Manufacturing overhead is allocated to the cost of inventory based on the normal production capacity. Unallocated overhead during periods of abnormally low production levels are recognized as cost of sales in the period in which they are incurred. Promotional merchandise is charged to expense at the time the merchandise is shipped to Estée Lauder’s customers. Included in inventory and promotional merchandise is an inventory obsolescence reserve, which represents the difference between the cost of the inventory and its estimated realizable value, based on various product sales projections. This reserve is calculated using an estimated obsolescence percentage applied to the inventory based on age, historical trends and requirements to support forecasted sales. In addition, and as necessary, specific reserves for future known or anticipated events may be established.

Source: 10-K (filing date: 2019-08-23).


Inventory Disclosure

Estée Lauder Cos. Inc., Statement of Financial Position, Inventory

US$ in millions

Microsoft Excel LibreOffice Calc
Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015 Jun 30, 2014
Raw materials hidden hidden hidden hidden hidden hidden
Work in process hidden hidden hidden hidden hidden hidden
Finished goods hidden hidden hidden hidden hidden hidden
Promotional merchandise hidden hidden hidden hidden hidden hidden
Inventory and promotional merchandise, net hidden hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2019-08-23), 10-K (filing date: 2018-08-24), 10-K (filing date: 2017-08-25), 10-K (filing date: 2016-08-24), 10-K (filing date: 2015-08-20), 10-K (filing date: 2014-08-20).

Item Description The company
Inventory and promotional merchandise, net Amount after valuation and LIFO reserves of inventory expected to be sold, or consumed within one year or operating cycle, if longer. Estée Lauder Cos. Inc.’s inventory and promotional merchandise, net increased from 2017 to 2018 and from 2018 to 2019.