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*** May 2009**
VOLUME 4, CHAPTER 4: “INVENTORY AND RELATED PROPERTY”
SUMMARY OF MAJOR CHANGES
All changes are denoted by blue font.
Substantive revisions are denoted by an * symbol preceding the section, paragraph, table, or figure that includes the revision.
Unless otherwise noted, chapters referenced are contained in this volume.
Hyperlinks are denoted by bold, italic, blue, and underlined font****.
The previous version dated July 2008 is archived.
PARAGRAPH EXPLANATION OF CHANGE/REVISION PURPOSE
040203.A
040304.A
040702.A
Updated reference from United States General Ledger (USSGL) Treasury Financial Manual to USSGL Standard Financial Information Structure (SFIS) Transaction Library.
Update
040102.C Adds a definition of approved acquisition objective. Update 040102.E Adds a definition of excess inventory. Update 040102.N Adds a definition of net realizable value (NRV). Update 040102.O Describes the NRV factor for determining the NRV of excess, obsolete, and unserviceable inventory. Update
040102.M
Deletes the policy that net realizable value for material in condition codes H, P, or S must be zero. Establishes the policy that all excess, obsolete, and unserviceable inventory and operating materials & supplies must be reported at its net realizable value.
Compliance
Table 4- Deletes the policy that excess OM&S must be reported at full value. Compliance
040303.D
Changes the policy that the value of inventory with condition codes H, P, or S is deemed to be $0 to require that all excess, obsolete, or unserviceable inventories be reported at net realizable value.
Compliance
040304.E
Modifies the definition of Excess, Obsolete, and Unserviceable Inventory (Account 1524). Update
Table 4- Deletes the policy that excess inventory must be reported at full value. Compliance
*** May 2009**
PARAGRAPH EXPLANATION OF CHANGE/REVISION PURPOSE
Table 4- Displays the linkage between inventory stratification categories and USSGL Accounts. Update
040402.D
Restores the requirement for billing for the cost of residual stocks of uniforms when there is a change to the uniform.
Restoration
040406.A.
Restores the policy for the cost of forgings and castings becoming part of the acquisition cost. Restoration
Adds a section with instructions about how to calculate a net realizable value factor and assigns responsibility for the calculation.
Compliance Tool
- * May
- VOLUME 4, CHAPTER 4: “INVENTORY AND RELATED PROPERTY”
- 0401 GENERAL
- *040101. Purpose
- *040102. Definitions
- Table 4-1 Event Transaction Inventory
- Financial Statement Disclosure
- 0402 OPERATING MATERIALS AND SUPPLIES
- Recognition of Operating Material and Supplies
- Valuation of Operating Materials and Supplies
- Accounting for Operating Materials And Supplies
- *Table 4-2
- 0403 INVENTORY...............................................................................................................
- General
- Recognition
- Valuation of Inventory
- Accounting for Inventory
- *Table 4-3 General Ledger Inventory Accounts vs Supply Condition Codes
- Table 4-4 Logistics Inventory Stratification vs General Ledger Accounts
- Reconciliations
- Adjustments for Physical Counts of Inventory
- Inventory Gains and Losses
- 0404 SUPPLY MANAGEMENT OPERATIONS
- Description
- Items to be Included in the Supply Management Activity Group
- Authorized Customers........................................................................................
- Issues Without Reimbursement..........................................................................
- Loans and Leases
- Government-Furnished Material (GFM)............................................................
- Capitalized Inventory
- Depot Level Reparables
- Return Of Items to the Supply Management Activity Group
- Excess Items Disposition
- 0405 WAR RESERVE MATERIEL..................................................................................... Table of Contents
- Definition
- Funding for War Reserve Materiel
- Accounting for War Reserve Materiel
- Acquisition of War Reserve Materiel
- Disposition of War Reserve Materiel
- 0406 STOCKPILE MATERIALS
- Description
- Recognition of Stockpile Materials
- Valuation of Stockpile Materials
- Accounting for Stockpile Materials
- Table 4-5 National Defense Stockpile Inventory
- Reconciling Inventory Records
- Research Grants
- 0407 WORK-IN-PROCESS
- General
- Accounting for Work-in-Process
- Inventory Work-in-process Accounts
- *0408 DETERMINING NET REALIZABLE VALUE
- Net Realizable Value Factor
- Factor Availability
- Instructions for Calculation of Net Realizable Value Factor
- The Template for Calculating Net Realizable Value Factor
- Template NRV Template...........................................................................................................
*** May 2009 CHAPTER 4**
INVENTORY AND RELATED PROPERTY
0401 GENERAL
***** 040101. Purpose
A. This chapter prescribes the accounting policy and related requirements necessary to establish financial control over DoD inventory, materials and supplies including stockpile materials. The chapter describes the applicable United States Government Standard General Ledger (USSGL) accounts as prescribed in Volume 1, Chapter 7, for use in accounting for inventory, operating materials and supplies, and stockpile materials. Posting transactions are in accordance with the SFIS transaction library at United States Standard General Ledger Standard Financial Information Structure (SFIS) Transaction Library.
B. Accounting requirements and procedures relating to Operating Materials and Supplies, Inventory, and Stockpile Materials addressed in this chapter are in accordance with the Statement of Federal Financial Accounting Standards SFFAS Number 3 , “Accounting for Inventory and Related Property,” and Interpretation 7 , “Items Held for Remanufacture,” as published by the Federal Accounting Standards Advisory Board. This chapter addresses the unique accounting and reporting requirements for these different types of inventories. The provisions of this chapter apply to all DoD activities, including the Defense Working Capital Fund (DWCF) activities, unless otherwise noted.
*040102. Definitions
A. Abnormal Costs. Abnormal costs include any costs that are in excess of the cost to purchase and place in service a new item with similar features and useful life, such as excessive handling and rework costs.
B. Acquisition Cost. Acquisition cost is the amount, net of both trade and cash discounts, paid for the property, plus transportation costs and other ancillary costs to bring the items to their current condition and location.
C. Approved Acquisition Objective. See DoD 4140.01 , “DoD Supply Chain Material Management Regulation,” for authoritative definitions of the terms approved acquisition objective, economic retention stock, and contingency retention stock.
D. Consumption Method of Accounting. The consumption method of accounting requires that when operating materials or supplies are produced or purchased they must be recognized and reported as assets. The cost of goods must be removed from the applicable operating materials and supplies asset account and reported as an operating expense in the period the items are issued to an end user for consumption in normal operations.
*** May 2009**
Table 4-1 Event Transaction Inventory
EvenT Transaction Inventory MAC Qty Value Qty Value
Beginning Balance 10 $10, $1,
Sale of 2 units (2) ($2,000) 8 $8, $1,
Purchase of 4 units @ $1600 4 $6,400 12 $14, $1,
Sale of 1 unit (1) ($1,200) 11 $13, $1,
Remanufacture of 4 units @ $1575 4 $6,300 15 $19, $1,
Sale of 1 unit $1,300 (1) ($1,300) 14 $18, $1,
N. Net Realizable Value (NRV). The FASAB defines net realizable value as the estimated amount that can be recovered from selling or disposing of an item less the estimated costs of completion, holding and disposal.
O. Net Realizable Value Factor. The net realizable value of excess (serviceable and unserviceable), obsolete, or unserviceable (EOU) inventory or operating materials and supplies (I&OM&S) must be determined by multiplying the value of the I&OM&S by a factor developed annually by the Defense Reutilization and Marketing Service (DRMS). All Components must use this DRMS developed factor for estimating net realizable value for the annual Department of Defense, “Supply Systems Inventory Report.” See Section 0408.
P. Obsolete Inventory and Operating Materials and Supplies. Material that is no longer needed due to changes in technology, laws, customs, or operations.
Q. Operating Materials and Supplies. Operating materials and supplies consist of tangible personal property to be consumed in normal operations. Excluded are (a) goods that have been acquired for use in constructing real property, (b) stockpile materials, and (c) inventory held for sale.
R. Operating Materials and Supplies In Transit. Operating materials and supplies in transit is material in transit from commercial and government suppliers; material whose title has passed but the material has not been received and accepted at the final designated destination; material between storage locations; or material temporarily in use or on loan with contractors or schools.
S. Purchases Method of Accounting. The purchases method of accounting provides that operating materials and supplies are expensed when purchased. The purchase
*** May 2009**
method may be applied to operating materials and supplies if: (1) operating materials and supplies are not significant amounts, (2) they are in the hands of the end user for normal operations, or (3) it is not cost beneficial to apply the consumption method of accounting.
T. Reparables. Reparables are inventory items that can be repaired economically and for which repair (at either field or depot level) is considered in meeting computed inventory requirements. The Department authorizes Supply Management Activity Groups (SMAG) to finance reparable items, including their transportation, acquisition, overhaul, progressive maintenance, renovation, rework, repair, manufacture, reclamation, alteration, and/or software support. Reparables can also be in an unserviceable condition, when furnished to the contractor for repair, modification, or overhaul. Unserviceable Reparables are often referred to as carcasses.
U. Standard Price. The price customers are charged, which for a DoD Inventory Control Point managed item (excluding subsistence), remains constant throughout a fiscal year except for the correction of significant errors. The standard price is calculated based on various factors which include the replenishment cost of the item plus surcharges to recover costs for transportation; inventory loss, obsolescence and maintenance; depreciation; and supply operations. The formula for determining standard price is latest acquisition cost plus overhead cost recovery.
V. Stockpile Materials. Stockpile materials are strategic and critical materials held due to statutory requirements for use in national defense, conservation or national emergencies. They are not held with the intent of selling in the ordinary course of business. The following items are specifically excluded from stockpile materials: (a) items that are held by an agency for sale for use in normal operations and (b) items that are held for use in the event of an agency's operating emergency or contingency.
W. War Reserve Material. War reserve/mobilization items are those materials that, in addition to peacetime assets normally available on any given date, are necessary to equip and support the increase in military requirements forecasts contingent on an outbreak of war. War reserves sustain operations until resupply can be affected.
X. Work-in-process. Work-in-process consists of products that are being manufactured or fabricated but are not yet complete. Work-in-process consists of the costs of direct materials, direct labor, direct purchased services, and indirect costs, including general and administrative costs, used in producing or repairing an end item (customized equipment or personal property), whether fabricated by the Department of Defense (DoD) or by a non-DoD organization under contract. Work-in-process accounts bring costs under financial control and segregate them from current accounting period expenses.
- Financial Statement Disclosure
For detailed requirements on financial statement disclosure, refer to Volume 6B, Chapter 10.
*** May 2009**
- Serviceable operating materials and supplies will be valued at historical cost using the MAC flow assumption.
- Under the allowance method, operating materials and supplies held for repair must be valued at the same value as a serviceable item. However, an allowance for repairs contra-asset account (i.e. repair allowance) must be established. The annual (or other period) credit(s) required to bring the repair allowance to the current estimated cost of repairs must be recognized as current period operating expenses. As the repairs are made, the cost of repairs must be charged (debited) to the allowance for repairs account. The Department of Defense has decided to use the allowance method when accounting for Operating Materials and Supplies Held for Repair.
- Under the direct method, operating materials and supplies held for repair must be valued at the same value as a serviceable item less the estimated repair costs. When the repair is actually made, the cost of the repair must be capitalized in the inventory account up to the value of a serviceable item. Any difference between the initial estimated repair cost and the actual repair cost must be either debited or credited to the repair expense account.
- Accounting for Operating Materials And Supplies
*A. The general ledger accounts discussed in this chapter must be reported in the financial statements required by the Treasury and for other reporting requirements mandated by Congress and OMB. Each account must be updated based on applicable source documents. Source documents includes contracts, invoices, receiving reports, payment vouchers, material- return documents, transfer documents, inventory documents, issue and shipping documents, sales records, and documented gains and losses. A discussion of the operating materials and supplies accounts is provided in the following paragraphs. Detailed posting transactions are outlined in the SFIS transaction library at United States Standard General Ledger Standard Financial Information Structure (SFIS) Transaction Library. Descriptions of the USSGL accounts for operating materials and supplies are provided in the following paragraphs.
B. Operating Materials and Supplies Held for Use (Account 1511). This account is used to record the value of materials and supplies held for use in normal operations. Materials and supplies should not exceed the amount expected to be used within normal business operations unless documentation justifying an excess supply is developed and maintained for review. This account is used to record the initial acceptance of materials and supplies in transit when title has passed but the items have not been received and accepted. Items in transit between DoD accounting entities must be kept under financial accounting control at all times. Activities may want to create a sub-account to track these items in transit (e.g. 1511.1); however, on the financial statements the balance in this account will be reflected at the summary level. As such this account is intended to be used by any DoD Component that maintains supplies and materials.
C. Operating Materials and Supplies Held in Reserve for Future Use (Account 1512). This account is used to record the value of stocks of materials and supplies maintained
*** May 2009**
because they are not readily available in the market and there is more than a remote chance that they will eventually be needed, although not necessarily in the normal course of operations.
D. Operating Materials and Supplies – Excess, Obsolete and Unserviceable (Account 1513). This account is used to record the value of operating materials and supplies (serviceable or unserviceable) that exceed the amount expected to be used in normal operations and do not meet management’s criteria to be held in reserve for future use. Obsolete operating materials and supplies include stocks that are no longer needed due to changes in technology, laws, customs or operations. Unserviceable operating materials and supplies are items that are physically damaged and cannot be consumed in operations.
E. Operating Materials and Supplies Held for Repair or Remanufacturing (Account 1514). This account is used to record the value of materials and supplies that are not in usable condition, but can be economically repaired. The objective is to rebuild items as an alternative and rotating source of supply. Once rebuilt, the items will be returned to Operating Materials and Supplies Held for Use
F. Relationship of General Ledger OM&S Accounts to Logistic Supply Condition Codes. OM&S recorded in financial records should be identifiable to OM&S recorded in logistic records and vice versa. Table 4-2 displays the relationship of logistic supply categories to general ledger financial inventory accounts.
- Supply Condition Codes. Supply condition codes classify material in terms of readiness for issue and use or identify action underway to change the status of material. Supply condition codes currently in use within the DoD are defined in DoD 4000.25-2-M, “Military Standard Transaction Reporting and Accounting Procedures.”
- Relationship of Logistic Categories to Accounting Classifications for OM&S. Table 4-2 shows the relationship of logistics supply categories to general ledger OM&S accounts.
*** May 2009** G. Operating Materials and Supplies – Allowance (Account 1519). This account is used to record the amount of estimated repairs needed for damaged operating materials and supplies and the estimated gain or loss on the value of OM&S due to unrealized holding gains and losses.
0403 INVENTORY
- General
This section sets forth the policies for recognition, valuation, and procedures for accounting for inventory.
- Recognition
Inventory must be recognized when title passes to the purchasing entity or when the goods are delivered to the purchasing entity.
- Valuation of Inventory
The Department’s policy is that inventory must be valued at historical cost using the MAC flow assumption. However, the Department has also approved, for specific use, the first in, first out (FIFO) and latest acquisition cost (LAC) flow assumptions for calculating historical cost. Statement of Federal Financial Accounting Standards (SFFAS) No. 3, “Accounting for Inventory and Related Property,” SFFAS 3 defines each of the three assumptions as means for arriving at historical cost. In addition, FASAB Interpretation 7, “Items Held for Remanufacture,” Interpretation 7 addresses the valuation of items held for repair that, once repaired/remanufactured/upgraded, are returned to Inventory Held for Sale and must be valued at historical cost using the MAC assumption.
A. The Defense Logistics Agency will value its fuels inventory held for sale at historical cost using the first in, first out cost flow assumption.
B. The Defense Commissary Agency will value its inventory consisting of grocery and household products using latest acquisition cost adjusted for holding gains and losses.
C. Entities must use MAC flow assumption to value inventory held for repair/remanufacture at historical cost. The historical cost of reparable carcass (carcass) is the amount paid for the carcass, generally the credit given to the customer for returning it. The amount to credit for the carcass is the latest acquisition cost less the latest repair cost. Once the carcass is repaired the cost to return the item to a usable condition (repair cost) is added to the cost of the carcass and the item is capitalized. The capitalized item is treated as if it was a purchase for calculating the historical cost of inventory using the MAC flow assumption as illustrated in table 4-1. Abnormal costs, such as excessive handling or rework costs, over the cost of available new items must be charged as an operations expense of the period and cannot be capitalized.
*** May 2009** *D. Excess, obsolete, and unserviceable inventory must be valued as its expected net realizable value. The difference between the value before identification as excess, obsolete, or unserviceable and the estimated net realizable value must be recognized as a loss (or gain) when a determination that it is excess, obsolete, or unserviceable is made even though the disposition of the inventory may not occur until a later period. At the time of actual disposal, recognize any subsequent changes to the net realizable value.
E. Supply Management activities must calculate and report the costs of all inventory sold, i.e., cost of goods sold at historical cost using the MAC flow assumption. Cost of goods sold is the balance of USSGL 6500. USSGL 6500 may be verified by using the following formula:
Beginning Inventory at historical cost Plus: Increases in Goods for Sale (Purchases, Remanufacturing Costs, Capitalized Inventory, Other Gains) Less: Disposals or Other Decreases in Goods for Sale (Including Other Losses) at historical cost Equals: Cost of Goods Available for Sale at historical cost Less: Ending Inventory at historical cost Equals: Cost of Goods Sold at historical cost
*040304. Accounting for Inventory
*A. Detailed posting transactions are outlined in the SFIS transaction library at United States Standard General Ledger Standard Financial Information Structure (SFIS) Transaction Library. Inventory accounts are authorized for use by activities that hold items for resale, use items in the process of production for sale, and consume items in the production of goods for sale or in the provision of services for a fee. Entities that hold supplies and materials for issue without reimbursement or for use without earning a fee own operating materials and supplies rather than inventory and should refer to section 0402. Refer to section 0407 for inventory accounts for work-in-process. A description of the applicable inventory accounts follow:
B. Inventory Purchased for Resale (Account 1521). This account is used to record the value of inventory purchased for resale which are in a usable condition and are available for immediate resale. The USSGL account includes entries to record receipt of material purchases, sale of inventory items at cost, issue without reimbursement, reclassification of inventory, and to record a gain when inventory is revalued. Activities may need to create a sub-account to record inventory in transit (e. g., 1521.1). However, on the financial statements the balance in this account will be reflected at the summary level. See paragraph 19 of SFFAS No. 3.
C. Inventory Held in Reserve for Future Sale (Account 1522). This account is used to record the value of inventory held in reserve for future sale and includes items which have been suspended in the logistical system and are currently not available for use, or items that are not available for use because they require limited restoration such as cleaning, painting, or
*** May 2009**
*Table 4-3. General Ledger Inventory Accounts vs Supply Condition Codes
U.S. Standard General Ledger Account
Supply Condition Codes
1521 Inventory Purchased For Resale
A Serviceable Issuable Without Qualification B Serviceable Issuable With Qualification C Serviceable Priority Issue D Serviceable Test/Modification Use this account to record amounts for inventory with condition codes A-D up to the approved acquisition objective (AAO). [Excludes Excess, Economic Retention and Contingency Retention Inventory] 1522 Inventory Held in Reserve for Future Sale
E Unserviceable Reparable (Limited Cost to Restore) J Suspended (In Stock) K Suspended (Returns) L Suspended (In Litigation) Q Suspended (Quality Deficient Exhibits) Use this account to record amounts for inventory with condition codes A-D, E, J, K, L, and Q. [Excludes Excess Inventory] 1523 Inventory Held for Repair (Remanufacturing)
F Unserviceable Reparable G Unserviceable Incomplete M Suspended (In Work) R Suspended (Reclaimed Items, Awaiting Condition Determination)
Use this account to record amounts for all inventory with condition codes F, G, M, and R. that is above the AAO and is retained for economic or contingency purposes. [Excludes Excess Inventory] 1524 Inventory - Excess, Obsolete, or Unserviceable
Use this account to record amounts for inventory that is NOT reportable in USSGL accounts 1521, 1522, or 1523. The inventory reported using this account must be valued at its NRV. [Includes Serviceable and Unserviceable Excess Inventory] Note 1: Condition Code N is for Ammunition Stocks only, which are classified as OM&S. Condition Code V is for Condemned Ammunition. Note 2: Condition Codes do not distinguish War Reserve/Mobilization items from inventory items.
*** May 2009 *** 3. Logistics Inventory Categories. Table 4-4 illustrates the relationship between the logistics inventory stratification categories and the general ledger accounts.
Table 4-4. Logistics Inventory Stratification vs General Ledger Accounts
- Reconciliations
Activities must reconcile line item accountability records to balances recorded in the general ledger inventory accounts at least quarterly. Activities may require reconciliations more frequently. Activities must investigate the differences between line item accountability records and general ledger balances to determine the cause(s) of the difference(s). Activities must then correct errors found during the investigation.
- Adjustments for Physical Counts of Inventory
Activities must take physical counts of inventories in accordance with the procedures prescribed in DoD 4140.01 , “DoD Materiel Management Regulation.” Activities must adjust the general ledger for differences between the general ledger balances and the physical count.
Category Serviceable Unservicable Repair Retain
Excess USSGL 1524 USSGL 1524 No No
Contingency Retention USSGL 1522^ USSGL 1523^ No^ Yes
Economic Retention USSGL 1522^ USSGL 1523^ No^ Yes
Approved Acquisition Objective (AAO) USSGL 1521^ USSGL 1523^ No^ Yes
Requirement USSGL 1521 USSGL 1523 Yes Yes
Inventory
Table 4-
*** May 2009** B. Subsistence Items. The SMAGs and the Defense Commissary Agency must plan for, procure, manage, distribute, and insure wholesomeness of subsistence products throughout the supply chain. Subsistence items must be procured to provide healthy, wholesome, nutritious food items to members of Armed Forces and other persons being fed by the DoD Components. Sub-classes of subsistence items include in-flight rations, combat rations, refrigerated subsistence and non-refrigerated subsistence.
C. Military Exchange Items. DoD Instruction 1338.18 , “Armed Forces Clothing Monetary Allowance Procedures,” assigns management’s responsibility to the SMAGs for items procured primarily for sale to members of the Armed Forces and other individuals or organizations authorized by legislation. These items include clothing sold by a military clothing resale activity and items sold in a ship's store. They also include personal items for health, comfort, and recreation.
*D. Military Clothing Items and Individual Equipment. The Department authorizes military exchange systems to act as agents of the SMAG to sell military clothing items to members of the Armed Forces. The Defense Logistics Agency (DLA) must procure military clothing requirements for the DoD, and bill users at standard prices. Besides uniforms, this supply class also includes combat equipment, tentage, tool sets and kits, hand tools, and cleaning equipment and supplies. When these items are replaced, the wholesale item manager must prepare a billing to make an expenditure transfer from the applicable military personnel appropriation account or operation and maintenance appropriation to the wholesale inventory account. The billing amount must cover the cost of the residual stocks only for those items above the initial buy and safety levels of the item being replaced.
E. Fuel. DoD Components must buy their fuel through DLA. The DLA must bill DoD customers at standard prices and other federal and non-federal government customers at cost plus the approved DLA surcharge. In isolated locations, where DLA has authorized a DoD customer to procure fuel on the local market, payment may be made by DLA or the customer depending on local circumstances. If payment is made by the DoD customer, then DLA will reimburse the customer for the actual cost of the fuel and bill for the fuel based on standard prices. Other items in this supply class are preservatives, liquid and compressed gases, chemical products, coolants, deicing, and antifreeze components.
F. Construction Materials. The SMAGs must manage construction materials including installed equipment, fortification materials, and barrier materials. This includes such items as wood, wire, and sandbags.
G. Medical. The SMAGs must manage medical materials supported in the “medical supply chain.” This materiel includes pharmaceutical, medical-surgical, dental, medical laboratory, radiology and optometry supplies. It also includes preventive medicine items and medical equipment.
H. Initial Spares. Initial spares are spare and repair parts that support newly fielded weapons systems during the initial period of operation until the supply system can support the demand generated by the systems. Replenishment spares are spare and repair parts
*** May 2009**
resupplying initial stocks. The SMAGs will acquire initial and replenishment spares based on the materiel support date.
I. Nonmilitary Programs. The SMAGs must manage material used to support nonmilitary or civic action programs. These programs are intended for agricultural and economic development. Sales of these materials will be made at standard prices.
- Authorized Customers.
A SMAG is authorized to sell items to:
A. A Federal Government-funded activity or an activity empowered to perform a Federal Government-legislated function.
B. A DoD-sponsored non-appropriated fund instrumentality.
C. A State Department-sponsored employee commissary located outside the United States.
D. A foreign government when an authorized contractual relationship has been established.
E. A Federal Government contractor, when the contract specifically provides for the purchase of items by the contractor from the Government.
F. Members of the Armed Forces and other individuals authorized by law to purchase commissary and clothing items.
G. The private sector, state or local governments when purchasing non-excess personal Exchange/Sale property as authorized by the Federal Property and Administrative Services Act of 1949 as amended in 40 U.S.C. Chapter 5, Section 503. United States Code
H. Other entities, when authorized by duly appointed officials.
- Issues Without Reimbursement
A SMAG item may not be issued or transferred without a funded customer order except as specifically authorized in the following subparagraphs. Events for which an issue is authorized without receipt of a funded customer order must be accounted for in the same manner as a normal sale with the exception that an allowance for loss on accounts receivable may be established when necessary.
A. Domestic Civil Emergency. A SMAG item may be issued without immediate reimbursement when action is being taken to provide civil emergency relief assistance in accordance with the policies and procedures provided in DoD Directive 3025.18 , “Defense Support of Civil Authorities (DSCA).” However, an accounts receivable must be established for
