Do you need to inventory small items (for use in line 7, form 1125-A)?

[TurboJake]

For example, a furniture maker creates chairs. She uses various fasteners in her business (brackets, screws, nails) in order to create the furniture. The fasteners become a permanent part of the finished product that is then sold.

Does she need to inventory small items like these fasteners? Can she establish a policy to only inventory items above a certain value (e.g., the wood and fabric used in the creation of the bookcases)?

This way, she wouldn't need to worry about how many boxes of screws she has...or worse, how many screws she has remaining.

[Anita01 · Accepted solution]

She does not need to inventory small items like this as they could be entered as supplies.  Yes, she can establish a bottom value for costs before considering things as inventory, but practicality also comes into it.   It would be a huge waste of time to try to figure out how many of these very tine items she had remaining in inventory at year-end.