Northrop Grumman Corp. (NOC)
Analysis of Inventory
Accounting Policy on Inventory
Inventoried costs generally comprise costs associated with unsatisfied performance obligations on contracts accounted for using point in time revenue recognition, costs incurred in excess of existing contract requirements or funding that are probable of recovery and other accrued contract costs that are expected to be recoverable when allocated to specific contracts. Product inventory primarily consists of raw materials and is stated at the lower of cost or net realizable value, generally using the average method.
Accumulated contract costs in inventoried costs include costs such as direct production costs, factory and engineering overhead, production tooling costs, and allowable G&A. Inventoried costs are classified as current assets and, in accordance with industry practice, include amounts related to contracts having production cycles longer than one year.
Source: 10-K (filing date: 2019-01-31).
Northrop Grumman Corp., balance sheet: inventory
US$ in millions
|Inventoried costs, net||Amount after valuation and LIFO reserves of inventory expected to be sold, or consumed within one year or operating cycle, if longer.||Northrop Grumman Corp.’s inventoried costs, net decreased from 2016 to 2017 and from 2017 to 2018.|