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Move Inventory from Balance Sheet to Income Statement and attach the cost to a Project
I’m hoping for someone to help with best practice in this situation
Background: We are a small company. Most of our work is on a fixed-price one-off project basis. We buy most of the parts for our projects as Non-Inventory Items and point the COGS/Expense account for these items to our Direct Material Income Statement account. We satisfy the Matching Principle by adjusting our Revenue using the Earned Value methodology.
Once the project is designed, our engineers issue a BOM and our purchasing person buys most of the Non-Inventory Items and the costs go directly to the Income Statement.
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