Hubbell Policies

Example: Business Unit A performs a physical inventory observation for the year-ended December 31, 20X1 and the following facts and circumstances are applicable.

Date of Observation:

October 15, 20X1

Estimated Date of Next Observation:

October 15, 20X2

Shortfall in Inventory (loss) as a result of the Oct 15, 20X1 observation:

$120,000

Required Reserve at October 31, 20X1:

$0

Required Reserve at December 31, 20X1

$20,000 ($120,000/12 x 2 mos. (Nov & Dec))

ADMINISTRATION

Roles and Responsibilities. Business unit controllers have responsibility in overseeing compliance with this procedure.

Monitoring, Evaluation and Review. All business units are required to document the date of their most recent annual physical inventory observation for each of their locations, the results of the observation including the amount of the loss or gain, and the estimated date of their next annual physical observation as part of their month-end Balance Sheet account reconciliation for the physical inventory reserve even if the balance the general ledger balance is zero. Exceptions. In order to obtain an exception to this procedure a written request must be submitted to the Corporate Controller that contains the following: − Compelling business reason why the Reserve for Physical Inventory Procedure does not apply to the requesting business unit.

ACCOUNTING AND DISCLOSURE

None

REPORTING

None

DEFINITIONS

Business unit controller shall mean individual(s) responsible for ensuring the accuracy of the month-end financial statements submitted to Corporate.

RELATED DOCUMENTS (Policies, Guidelines, Standards) • FIN-34 Physical Inventory Policy • Physical Inventory Shrink Reserve Template

VERSION

Version

Approval

Effective 2014.08.01 2019.08.15

Changes

1 2

J. Capozzoli, A. Hsieh, S. Mais J. Capozzoli, K. Lane, S. Mais

Original Issue

Conformed to the new template

149