In Process Inventory. Excess and obsolete items are generally not found in work in process inventory because of the constant flow of inventory in and out of the production process. However, any job that remains in work in process for more than 120 days must be inventoried and any excess and obsolete items identified must be immediately written off and disposed. Transfer of Excess and Obsolete Inventory. Upon request, the factory's Program Manager is to provide assistance in identifying locations that may need the inventory.
Inventory transferred to other locations is to be shipped at book value.
If the actual value of such inventory is less than book value, the sending and receiving locations are to negotiate an acceptable valuation. Shipping charges incurred resulting from the transfer are to be borne by the sending location. Write-Off of Excess and Obsolete Inventory. Procedures for obtaining approval to write off excess and obsolete inventory resulting from the annual review is contained in Section 8. Once excess and obsolete inventory has been identified and approval has been obtained to write it off, disposal procedures must begin immediately.