Hubbell Policies

IN-TRANSIT INVENTORY POLICY

English

Owner : Vice President, Controller

Last Review: 2015.08.11

FIN – 30

Department: Finance

POLICY

This policy applies to all inventories in the possession of a freight carrier at month-end and applies to in-bound inventory (shipments from vendors) and out-bound inventory (sales of Hubbell product to customers, distributors etc.). Each business unit is required to determine whether Hubbell holds title to such inventory to ensure proper classification in the general ledger. If Hubbell holds title to such inventory it should be included in the Company’s inventory value; if title is not held, the inventory is excluded from the Company’s inventory value.

SCOPE

The policy applies to all business units.

PURPOSE

Completeness and accuracy - ensuring all general ledger inventories that are in-transit at month end are properly included/excluded and classified in accordance with U.S. GAAP.

PROCEDURE

In order to comply with this policy, each business unit must identify when title passes according to the applicable contractual terms - FOB and/or INCOTERMS – under which it transacts.

In-bound in-transit inventory should be recorded at standard cost and any purchase price variance (PPV) recorded with inventory is received.

For purposes of U.S. GAAP reporting in HFM, in-transit inventory relating to intercompany inventory purchases should exclude any intercompany profit by the purchasing entity. For year-end statutory reporting purposes in the special purpose ledger, the business unit may need to reflect intercompany profit that in-transit inventory. In that case the business unit may make the required adjustments in the special purpose ledger and must ensure that by doing so intercompany profit is not included in the U.S. GAAP results reported in HFM.

ADMINISTRATION

Roles and Responsibilities. None

Monitoring, Evaluation and Review. None

Exceptions. None

ACCOUNTING AND DISCLOSURE

None

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