Closing stock of raw material

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1359 Points Posted on 05 December 2022
A company purchase a raw material which will ready for manufacturing after 10 yr mean the company have to hold the raw material for at least 10 yr then it will ready for manufacturing then how it is recorded?
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On 05 December 2022 at 19:54 Report
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Quick Summary
This discussion addresses the accounting treatment for raw materials that require a 10-year holding period before manufacturing. The consensus is to record these as a purchase entry and include them in closing stock. Annual holding costs should be added to the inventory's value until it's ready for use or sold.

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Accounts & Finance Professional
19 Points Posted on 05 December 2022

What kind of Raw material you want to keep for 10 years?

Is it liquor? 

Then just do purchase entry only. 

And it will part of closing stock until & unless you sell this.

 

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On 05 December 2022 at 21:00
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Finance
4592 Points Posted on 06 December 2022

Iron is also anorher example i guess. Keep purchases and keep on adding costs of holding inventory annually to the cost of inventory

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On 06 December 2022 at 09:48

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