Inventory refers to any property or supplies that are on hand to be used or consumed. Common types of inventory found in campaigns include signs and supports, banners, pamphlets, letterhead, and posters.
Inventory does not include capital items. Capital items are goods that are used over a long
period of time, like a computer or desk. Capital items will be used during a campaign but will not be completely “used up”.
The moment inventory is used it becomes an expense of the campaign. Inventory is an important concept because it affects the amount of election expenses reported and, because of this, the amount of reimbursement that an eligible candidate receives.
Inventory should be counted three times during the candidacy period:
a) At the start of the election period (the day the writ is issued);
b) At 8:00pm on election day; and
c) At the end of the candidacy period.
A.
Count Beginning Inventory
If you have beginning inventory then you will have to count and value it on the day the election is called (writ day). Prior to the calling of the election, make preliminary
arrangements to count inventory on the day that the election is called. Make sure your auditor knows that you are doing the count as he or she may want to attend.
Once you have recorded the count of items, you then need to determine the value that should be attached to the items. The value of the inventory items depends on how and where the inventory was acquired.
The reason you want to count and value beginning inventory is because as you use the inventory throughout the election period, these values affect the amount of election expenses and reimbursement. Whether items are reported as monetary election expenses (that are reimbursable) or non-monetary election expenses (that are non-reimbursable) depends on the source of the inventory items:
If the items were used in a previous election, their value must be reported as a non-
monetary election expense. These expenses will not be eligible for reimbursement since the items were eligible for reimbursement in a previous election;
If the items were purchased for a previous election but not used in the previous
election, or were purchased for the current election, the election expense should be
reported as one for which money was paid or is owing (monetary). This includes items transferred from the candidate's constituency association or registered party. If the candidate qualifies for reimbursement then the value of this type of inventory used as an
election expense is reimbursable. (The inventory purchased in the previous election
would not have been eligible for reimbursement in the previous election because it was not used);
If the items were provided from an individual then the value would be reported as a
Was item used in a
previous election?
Type of Election
Expense
Value
Eligible for
Reimbursement?
Yes
Non-monetary
Market Value
No
No
Monetary
Amount paid/owed
Yes
B.
Election Day Inventory
The election period ends at 8 p.m. on Election Day. If the campaign has any inventory on hand at this point, then it must be counted after 8 p.m. If this is the situation, please make sure that you let your auditor know that you will be doing a count as he or she will probably want to be there.
C.
Inventory at the End of the Candidacy Period
Ending inventory refers to any property or supplies that are on hand at the end of the candidacy period and were not used.
Ending inventory does not include “Capital items” such as computers, desks, or other office furniture, but rather includes all items purchased or otherwise acquired during the campaign that were not used.
Example: If a candidate purchased a large supply of sign supports during the campaign but never use many of the supports, at the end of the campaign, the unused supports would be included in ending inventory.
If they had been used, they would have been an election expense (and not recorded as ending inventory).
In most cases, the inventory you counted on election day is the inventory that you will use as your “final” inventory for Form 922 (however, this is only the case if no inventory is used between election day and the end of the candidacy period). If your inventory changes after election day (because some of it was used after election day) you will have to count your inventory again on the day the candidacy period ends (and you should inform your auditor of this). In this case, the result of this later count will be the final inventory figure that you report on Form 922. Any inventory that was used (i.e. become an expense) between election day and the end of the candidacy period, should be recorded as a non-election expense because it falls outside of the election period.
Ending inventory should be valued at its cost.
“Cost” typically refers to the amount of money that is exchanged, or the amount of liability
incurred, for an item of inventory, including duties, freight and other amounts (which should be directly supported by invoices or other records).
D.
Value of Inventory Items Not Purchased
When inventory is contributed to a campaign without a charge, the inventory is considered to be a non-monetary contribution. The “cost” of the inventory is considered to be market value of the inventory items at the time of the contribution or purchase. In the latter situation (i.e. where inventory is purchased for less than market value), the amount by which market value exceeds the purchase price must be reported as a non-monetary contribution.
E.
Inventory Records
The following details should be included in the records that you maintain for the campaign’s inventory:
Description of the property and materials;
The date acquired or received;
The supplier name;
The unit value;
The quantity, and
The total value.
F.
Items Used
The following summary is provided to assist you in differentiating between the reporting of items that are used (both inside and outside of an election period) and those that are not used at all. For the purposes of this summary, assume that the only items under
consideration are signs.
For signs purchased by the candidate's campaign, the acquisition market value of the signs is:
Recorded as an election expense (which is reimbursable) if used in the election
period – only the portion actually used during the election period will be considered an election expense and would be reimbursable; and
Recorded as inventory if not used at all (or for that portion not used).
For signs purchased by the candidate's campaign in a previous election but never used in the previous election (i.e. never expensed), the acquisition market value in the previous election is:
Recorded as an election expense (which is reimbursable) if used in the current
election period; and
For signs purchased by the candidate's campaign in a previous election but used in the previous election (i.e. expensed) the acquisition market value of the goods in the previous election is:
Recorded as a non-monetary election expense (which is non-reimbursable) if used in
the current election period; and
Recorded as inventory if not used at all (or for that portion not used).
If an individual donates signs or pays for signs on behalf of the campaign, the acquisition market value of the signs is:
Recorded as a non-monetary election expense (which is non-reimbursable) if used in
the election period; and
Recorded as inventory if not used at all (or for that portion not used).
If the candidate's endorsing registered party buys signs and transfers them to the candidate's campaign, the acquisition market value of the goods is:
Recorded as an election expense (which is reimbursable) if used in the election
period; and
Recorded as inventory if not used at all (or for that portion not used).
Reclaimed signs – signs used during and then collected after an election: