a. Analysis and accounting treatment of inventory discrepancies

1. Inventory discrepancies above the threshold defined in the site procedure are analyzed and explained by the inventory manager who sends his analysis to the Finance responsible assigned. 

2. The analysis and final list of inventory count discrepancies are

• Signed off and dated by the inventory manager and the Finance responsible assigned,
• Archived as inventory supporting documentation as part of the accounts adjustments documentation.

b. Reports

1.  After each warehouse count, the Finance responsible assigned prepares an inventory report that includes:

• A physical inventory summary description (inventory type, scope, coverage rate, list of adjustment…)
• A list of the people who participated to the count
• An explanation of the most significant variances in quantity/ value (above the fixed threshold)
• A signature (hand written or by mail) of the report by all the people having responsibilities in the count (supervisors of counting team and of key-punching team, inventory manager)
• Validation by the Finance Manager or the Business Controller, the plant manager and the Enterprise Supply Chain Director when the sum of the adjustment is above a threshold defined in the procedure

2. Every month, the Finance responsible assigned prepares a “cycle counts monthly recapitulative report” that includes:

• An explanation of the most significant variances in quantity/ value (above the fixed threshold)
• Validation by the Finance Manager or the Business Controller, the plant manager and the Enterprise Supply Chain Director when the sum of the adjustment is above a threshold defined in the procedure

3. Every quarter, the Finance responsible assigned updates a progress report on physical inventories.