[Happen4reason]

Can you capitalize costs to get your product to a saleable state and wait to expense until goods are sold in a later period? The costs create a future economic value for the product. The costs are happening a year in advance of the sale of goods. I was thinking that pre-production costs could be capitalized. Does anyone know what authoritative literature reference this may relate to?

[mla1169]

It's covered in any intermediate accounting literature. Its part of any cost accounting textbook. I'm not sure what you consider “authoritative literature” but here are a few places you can find exactly what I explained above

https://www.learnmanagerialaccounting.com/FreeMaterial/productperiod/index.html

https://www.retailpackaging.com/blog/2009/06/book-keeping-and-packaging/

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Massachusetts CPA (non reporting) since 3/12.

[LaxCPA]

IRS publication 538 states that “Supplies that physically become a part of the item intended for sale.” should be included as inventory. There is no tax-GAAP difference in this case.

[LaxCPA]

IRS publication 538 states that “Supplies that physically become a part of the item intended for sale.” should be included as inventory. There is no tax-GAAP difference in this case.

[Author]

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