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FASB Statement 151 inventory-cost summary

Official historical summary explaining normal capacity allocation and current period treatment of abnormal idle facility, freight, handling, and spoilage costs.

Authority and currency

About this authority

Publisher
Financial Accounting Foundation
Standing
Primary authority
Version
Statement 151 summary
Relevant parts
Summary; reasons for issuing; inventory-cost and normal-capacity discussion
Currency
superseded · checked Aug 8, 2026

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The summary explains why abnormal idle-facility cost, freight, handling, and spoilage are current-period charges and why fixed production overhead uses normal capacity. Those distinctions prevent an inventory-cost schedule from becoming a receptacle for every expenditure near production.