Inventory Revaluation Clause Samples
The Inventory Revaluation clause establishes the process by which the value of inventory is periodically reassessed to reflect current market conditions or changes in cost. Typically, this clause outlines the methods and frequency for revaluing inventory, such as using market price updates or cost adjustments, and may specify who is responsible for conducting the revaluation. Its core practical function is to ensure that the financial records accurately represent the true value of inventory, thereby providing transparency and preventing discrepancies in financial reporting.
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Inventory Revaluation. For the purposes of implementing price changes agreed to in Paragraph 5.2, McDATA has option to buy down inventory to realize cost changes earlier than Forecasted effective date. The buy down value shall be the difference between the current component cost and the new quoted price for same components, multiplied by the quantity of on-hand and on-order (which cannot be adjusted) inventory received prior to purchase of components at the new price. McDATA agrees to issue a purchase order and Supplier shall invoice McDATA to cover the cost associated with the revaluation of inventory.
5. Paragraph 5.6 of the MPA is hereby renumbered to Paragraph 5.7 and shall remain unchanged.
6. Paragraph 7.4 is hereby added and shall read as follows:
Inventory Revaluation. The parties agree that component materials, which drive approximately [***] of the material cost of Products, will be reviewed and adjusted on a quarterly basis or as mutually agreed to by the Parties and such agreement will not be unreasonably withheld. Product quotes will be updated accordingly on a quarterly basis provided the Parties agree to the “Inventory Revaluation Method” for implementation of quarterly component cost adjustments. The “Inventory Revaluation Method” is defined as McDATA’s payment to SSCI for the difference between the current component standard cost and the new quoted price for same components, multiplied by the quantity of on-hand and on-order (which cannot be adjusted) inventory received prior to purchase of components at the new price. SSCI shall provide a summary of the proposed revaluation including the component part number, present standard, new quote price and the quantity of inventory at the current standard cost. McDATA agrees to issue a purchase order to cover the cost associated with the revaluation of items, which will be cut in within the next quarter, plus any other items at McDATA’s discretion. SSCI shall invoice the total quarterly revaluation purchase order which consists of the net amount of purchase price variance for material purchased in the previous quarter. The effective date for the agreed to revaluation Product pricing shall be the first day of the new calendar quarter. McDATA agrees that the revaluation purchase order shall be issued no later than thirty (30) days after the end of the calendar quarter. The parties agree to quote specific items on a semi-annual basis, for particular products or processes i.e. spares, features, accessories, etc.
Inventory Revaluation. ▇▇▇▇▇▇ shall revalue the inventory of each --------------------- Product(NDC) at ▇▇▇▇▇▇ distribution centers and public warehouses as of close of business on December 31/st/ of each Contract Year during the Term, by multiplying (a) the number of units of such Product in ▇▇▇▇▇▇'▇ stock the shelf- life for which has not expired on December 31st of such Contract Year by (b) the Transfer Price of such Product(NDC) for the current Contract Year less the Transfer Price for such Product(NDC) for the following Contract Year (determined pursuant to Section 6.1 above). If the amount obtained from the calculation in the foregoing sentence is positive, Gensia Sicor shall pay to ▇▇▇▇▇▇ such amount, however; if the amount obtained from such calculation is negative, ▇▇▇▇▇▇ shall pay to Gensia Sicor such amount. The Parties shall account for any such revaluation in the first Calendar Quarter's reconciliation described in Section 7.4 hereof.
Inventory Revaluation. Regarding the approved components and materials purchased pursuant to this agreement, during the first week of each calendar quarter, USR will propose component inventory revaluation of material that is on hand or on open purchase orders with suppliers whose prices cannot be changed based upon the prices of components in the previous quarter compared to those used in the current quarter Product pricing. The parties shall agree the inventory revaluation for the current quarter within one (1) week of Customer’s receipt of USR’s proposal, the “Inventory Revaluation”.