What is included in the definition of materials and supplies?
Materials and supplies are tangible, non-inventory property used and consumed in your operations including:
- Acquired components – Costs of components acquired to maintain, repair, or improve tangible property owned, leased, or serviced by you and that's not acquired as part of a larger item of tangible property; or
- Consumables – Costs of fuel, lubricants, water, and similar items that are reasonably expected to be consumed in 12 months or less, beginning when used in operations; or
- 12 month property – Costs of tangible property that has an economic useful life of 12 months or less, beginning when the property is used or consumed in your operations; or
- $200 property – Costs of tangible property that has an acquisition cost or production cost of $200 or less.
The property need only fit into one of the above categories to qualify as a material or supply.
