[gschell21]

As a retailer how should I account for CRV. Should I add it to the cost of goods sold or is it a completely separate expense item.

[pready]

What is a CRV?

What is its use in the company, like do you sell it or do you use it? If it is sold by your company, then it would be inventory before the sale and COGS after the sale.

If it is used in the business then it would either be expensed or capitalized by the business. For example you puchase trash cans, then this would be expensed because it is not a material purchase by the company. But if you purchased a computer, which would be a material purchase by the company then this would be capitalized and depreciated. It just depends on the materiality of the purchase by the company.

[gschell21]

I'm sorry. I was not specific enough. CRV is the bottle deposit here in California. We are a chain of fuel stations and convenience stores. We pay the supplier and then charge the customer the same amount to recoup our cost. I ask because my company is currently including it with the cost of the drinks bought and therefore it is then counted as inventory. However, the revenue is separate and is not included with the merchandise sales so it is dropping our margins by a good 3 - 4% on drinks. In order to match industry wide standards for margins we are overpricing compared to the competition and holding back our sales growth. Specifically, it is the beer category which is extremely competitive and low margins anyway. I am just a lowly cashier, but it isn't the first time I found a flaw with our accounting procedures, so I am just looking for a second opinion before I make an *** of myself to the controller.