OtherInventoryOtherInventorySuppliesInventorySuppliesNetOfReservesOtherInventoryNetOfReservesOther inventory is the part of a company's inventory that does not fall into the standard classes of raw materials, work in process, or finished goods. It is most often supplies, such as maintenance materials, spare parts, packaging, and fuel used in production or operations, and can also include inventoried costs on long-term contracts and other categories specific to the company.
Like the rest of inventory, it is a current asset carried at cost, less any write-down needed when its value falls below cost.
Regulation S-X Rule 5-02.6 asks companies to disclose major classes of inventory where practicable, naming finished goods, inventoried costs relating to long-term contracts or programs, work in process, raw materials, and supplies. The last two classes, and anything a company reports under a heading of its own, commonly end up here. In XBRL filings, the SEC taxonomy tags other inventory before reserves as OtherInventory and after reserves as OtherInventoryNetOfReserves. Supplies are tagged OtherInventorySupplies before reserves and InventorySuppliesNetOfReserves after.
Inventory is measured under ASC 330, whether it is merchandise for sale or supplies consumed in production. Supplies differ from raw materials in that they may never become part of the finished product; lubricants, cleaning materials, and repair parts support the process rather than forming the output. Spare parts that are expected to be used over more than a year, or that relate to specific equipment, are sometimes classified as property, plant, and equipment instead, so treatment varies across companies.
For most companies other inventory is small relative to total inventory, but it can be significant in some industries. Utilities, airlines, mining companies, and oil refiners hold large stocks of fuel, spare parts, and materials. Analysts reviewing inventory quality should check the footnote for what is inside the category, since supplies do not turn into revenue the way finished goods do, and a build-up of spare parts may reflect maintenance needs rather than expected sales.
A: Mainly supplies used in operations, such as spare parts, maintenance materials, packaging, and fuel. It can also include inventoried contract costs or company-specific categories that do not fit the standard classes.
A: Raw materials become part of the finished product. Supplies are consumed in running the operation, such as repair parts or cleaning materials, and do not become part of what is sold.
A: Usually yes, because turnover is typically calculated on total inventory. Where supplies are large, analysts sometimes exclude them to focus on goods held for sale.
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