If a company charges customers to dispose of materials that they then turn in to a sellable product how do you account for the material before it's transformed into the sellable product.
So a stockpile of material that hasn't yet been processed into a product - raw materials - but there's no cost of purchasing the goods in the P&L (as we've charged the customer to dispose of the material) or any labour costs associated with processing yet. Can you make a stock provision crediting the P&L and debiting the B/S stock code and how should you value the raw material? I know the cost you can sell the end product for and how much it will costs to process the material to get to this end product. Any help would be appreciated. Thanks!