Ministry of Justice of Ukraine
November 2, 1999
of October 20, 1999 No. 246
About approval of the National provision (standard) of financial accounting
In pursuance of the Program of reforming of the system of financial accounting using international standards approved by the resolution of the Cabinet of Ministers of Ukraine of October 28, 1998 No. 1706, I ORDER:
1. Approve the National provision (standard) of the financial accounting 9 "Inventories" (further - the Provision (standard) 9) approved by Methodological council on financial accounting under the Ministry of Finance of Ukraine which is applied.
2. Determine that the specified National provision (standard) 9 is applied concerning accounting of transactions which happen since 2000.
3. Provide that other regulations of the Ministry of Finance of Ukraine on financial accounting are effective in part which does not contradict the National provision (standard) 9.
A. V. Litvin
Approved by the Order of the Ministry of Finance of Ukraine of October 20, 1999 No. 246
1. This National provision (standard) determines methodological bases of forming in financial accounting of inventory information and its disclosure in the financial reporting.
2. Regulations of this National provision (standard) are applied by the companies, the organizations and other legal entities (further - the companies) irrespective of patterns of ownership (except budgetary institutions and the companies which according to the legislation constitute the financial reporting under International Financial Reporting Standards).
3. Regulations of this National provision (standard) do not extend on:
3.1. Incomplete works on construction contracts, including contracts on provision of services which are directly connected with them.
3.2. Financial assets.
3.3. The current biological assets if they are estimated at fair value according to the National provision (standard) of the financial accounting 30 "Biological assets" approved by the order of the Ministry of Finance of Ukraine of November 18, 2005 N790 and registered in the Ministry of Justice of Ukraine on December 5, 2005 for N1456/11736, of minerals if they are estimated on the net value of realization according to other provisions (standards) of financial accounting.
4. The terms provided in provisions (standards) of financial accounting have such value:
Inventories - assets, which:
contain for further sale (distribution, transfer) under conditions of regular economic activity;
stay in production process for the purpose of further sale of product of production;
contain for consumption during production, performance of works and provision of services, and also enterprise management.
Net value of realization of inventories - the expected sales price of inventories in the conditions of regular activities less the expected expenses in conclusion of their production and realization.
Replacement cost - cost of acquisition.
Recognition and primary assessment of inventories
5. Inventories are recognized asset if there is probability that the company will receive in the future the economic benefits connected with their use, and their cost can be authentically determined.
6. For the purposes of financial accounting inventories include:
the raw materials, the main and auxiliary materials, components and other material values intended for production, performance of works, provision of services of distribution, transfer, servicing of production and administrative requirements;
work in progress in the form of not finished processing and creation of details, nodes, products and unfinished engineering procedures. Work in progress at the companies which perform works and provide services, consists from expenses on accomplishment of unfinished works (services) concerning which the company does not recognize the income yet;
the finished goods made at the company, held for sale and answering to the technical and quality characteristics provided by the agreement or other regulatory legal act;
goods in the form of material values which are acquired (are received) and contain the company for the purpose of further sale;
the invaluable and fast-worn-out objects which are used within no more than one year or normal operating cycle if it more than one year;
the current biological assets if they are estimated by this National provision (standard), and also agricultural products and products of forestry after its primary recognition.
7. Unit of the inventory bookkeeping is their name or uniform group (type).
8. The inventories acquired (received) or made are enlisted on balance of the company for primary cost.
9. The cost of inventories consisting of such actual expenses is primary inventory cost which are acquired for a fee:
the amount which is paid according to the agreement to the supplier (seller) less indirect taxes;
amounts of import duty;
the amounts of indirect taxes in connection with stock acquisition which are not compensated to the company;
transport and procurement expenses (costs for procurement of inventories, payment of rates (freight) for cargo-unloading works and transportation of inventories by all modes of transport to the place of their use, including expenses on risks insurance of transportation of inventories). The amount of transport and procurement expenses which is generalized on the separate sub-account of stock record accounts is monthly distributed between the stock remainder amount for the end of month under report and the amount of inventories which were disposed (used, implemented, bezoplatno transferred and so forth) for month under report. The amount of transport and procurement expenses which belongs to inventories which were disposed is determined as the work of average percent of transport and procurement expenses and inventory cost which were disposed, with its display on those accounts with which in correspondence disposal of these inventories is displayed. The average percent of transport and procurement expenses is determined by division of the amount of remaining balance of transport and procurement expenses for the beginning of month under report and transport and procurement expenses for month under report on the stock remainder amount for the beginning of month and inventories which arrived for month under report. Examples of distribution of transport and procurement expenses are given in appendix to the National provision (standard) 9.
other expenses which are directly connected with stock acquisition and finishing them to condition in which they are suitable for use in the planned purposes. Direct material expenses, direct expenses on compensation, other direct expenses of the company on completion and increase in qualitatively technical characteristics of inventories, in particular, belong to such expenses.
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