Finished Goods Inventory
Accounting glossary · Understand, connect, apply
Finished goods inventory consists of completed manufactured products held for sale to customers.
Example
A furniture maker transfers completed tables from Work in Process to Finished Goods when production is complete.
Remember the difference
Finished goods are not COGS until sold, subject to applicable inventory valuation adjustments.
Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.
Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.
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