USA Inventory storage fees

[cope]

I own a company and we sell travel and photography bags that are manufactured by a supplier in Vietnam. Once completed we ship the inventory to contracted warehouses where it's stored until sold. We pay storage fees to the contracted warehouses and we currently book the storage fees to COGS along with the direct cost of the inventory, fulfillment, and freight, etc.

Should we keep inventory storage fees in COGS and should they be incurred in the period we received an invoice? Or should storage fees be accrued and expensed when inventory is sold (like our other COGS)? I want to look at a P&L that will give me the most accurate picture of how we are operating and sometimes it seems like inventory storage fees are more fixed than the other costs in COGS.

Thanks!

 

[kirby]

The storage fees should be incurred in the period of storage. Consider if you had zero sales in a whole year, you still are responsible for paying storage costs. So storage costs are period costs and not costs associated with the sale of bags.