Inventory purchase costs

Purchase cost includes purchase price, import duties and non-recoverable taxes, transport and handling directly attributable to acquisition, less trade discounts and rebates. For an invoice, first deduct trade discounts, then add eligible freight and non-recoverable duties or taxes. The resulting amount is part of the inventory's cost until the goods are sold or written down. Purchase costs differ from production conversion costs. Deduct rebates received from suppliers when determining the net cost of the goods.

Also called: Inventories costs of purchase