Physical inventory audit Sample Clauses
A physical inventory audit clause establishes the requirement for a company to conduct a thorough count and verification of its tangible inventory items. This process typically involves periodically checking actual stock levels against recorded amounts, often with the participation of internal or external auditors. By mandating such audits, the clause helps ensure the accuracy of inventory records, detect discrepancies or losses, and maintain accountability, thereby reducing the risk of fraud or mismanagement.
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Physical inventory audit. 12.3.1 On a quarterly basis Jabil will arrange a cut-off date for and complete a physical inventory audit of all Consigned Components. Because the integrated circuit (IC) Components contain valuable intellectual property of Company, there is no shrinkage allowance for such Components. Variances will be identified and reported to Jabil by Company within 30 days of the physical inventory. Within 30 days of being notified of any such variance, Jabil shall provide Company with a written report that explains the variance and, if requested by Company, the Parties will meet to discuss same. Jabil will be responsible for reimbursement of any such verified variances reported and invoiced by Company. All other Consigned Components are subject to a shrinkage allowance of [*] of the volume of such Component or Product received during the three month period immediately prior to the physical inventory audit.
12.3.2 On a quarterly basis Jabil will arrange a cut-off date for and complete a physical inventory audit of all finished Products that have passed the applicable quality inspections, but remain unshipped and in Jabil’s possession at the end of such quarter. Jabil shall deliver such audit report to Company by the fifth (5th) business day immediately following the end of each Company Quarter End.
Physical inventory audit. 12.3.1 On a [***] basis Kin Yat will arrange a cut-off date for and complete a physical inventory audit of all Consigned Components. Because the [***] Components contain valuable intellectual property of iRobot, there is no shrinkage allowance for such Components. Variances will be identified and reported to Kin Yat by iRobot within [***] of the physical inventory. Within [***] of being notified of any such variance, Kin Yat shall provide iRobot a written report that, in iRobot’s sole discretion, explains the variance, or iRobot will charge or deduct from its next payment for the unexplained variance. All other Consigned Components are subject to a shrinkage allowance of [***]% of the volume of such Component or Product received during the [***] period immediately prior to the physical inventory audit.
12.3.2 On a [***] basis Kin Yat will arrange a cut-off date for and complete a physical inventory audit of all finished Products that have passed the applicable quality inspections, but remain unshipped and in Kin Yat’s possession at the end of such quarter. Kin Yat shall deliver such audit report to iRobot by the second business day immediately following the end of each iRobot Quarter End.
Physical inventory audit. Closing Date Financial Report -----------------------------------------------------------------
2.5.1 On the third day prior to the Closing Date, the Chief Financial Officer of Seller shall prepare a certificate (the "Closing Certificate") containing a proforma estimate of the Net Realizable Value as of the Closing Date (the "Preliminary Net Realizable Value") which shall be subject to limited procedures of inquiry by Buyer and Buyer's Accountants as to reasonableness. The Closing shall proceed, and the payments required to be made on the Closing Date pursuant to Section 2.6 shall be determined, on the basis of the Closing Certificate.
2.5.2 There shall be conducted by Buyer, in accordance with GAAP, a physical taking of the inventory commencing at 8:00 A.M., local time, on the Closing Date, at all of Seller's facilities where the Purchased Assets are located. With respect to any Inventory of Seller located at any premises not owned or leased by Seller, Buyer (or, if not available to Buyer, Seller) shall obtain from an appropriate representative of each Person who is in possession of any such off-site Inventory, written certification as to the amount of such off-site Inventory as of such date; provided, however, that with respect to inventory which is enroute, the parties may rely upon the invoice or other reliable evidence of the transaction. The valuation of Inventory will be computed by Buyer in accordance with GAAP and with the practices and procedures and other methods consistent with the definition herein of Net Realizable Value used in computing the value of Inventory for purposes of preparation of the Financial Statements (except to the extent inconsistent with GAAP or the definition herein of Net Realizable Value).
2.5.3 As promptly as reasonably practical and, in any event, not later than 30 days after the Closing Date, Buyer shall prepare and deliver to Seller a report as of the Closing Date in accordance with GAAP (the "Closing Date Financial Report"), which report shall set forth the aggregate Net Realizable Value determined in accordance with GAAP. For purposes of this Report, the aggregate "materiality" level shall not be less than $20,000. If Seller does not object in writing to the Closing Date Financial Report within fifteen (15) days after delivery, such Closing Date Financial Report shall automatically become final and conclusive. Any such written objection (the "Objection Notice") shall set out the reasons for Seller's objection, the a...