Holding costs

In accounting for inventories under IAS 2 storage or holding costs are generally expensed as they are incurred unless:

• storage is necessary before a further stage in the production process,
• the inventory is produced as a discrete project – e.g custom-built furnishings when the storage will be charged to the customer, or
• the inventory requires a maturation process to bring it into a saleable – e.g. whiskey, wine or cheese.