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If a material amount of inventory has been ordered through a formal purchase contract at the balance sheet date for future delivery at firm prices,

If a material amount of inventory has been ordered through a formal purchase contract at the balance sheet date for future delivery at firm prices,

an appropriation of retained earnings is necessary.

this fact must be disclosed.

disclosure is required only if prices have since risen substantially.

disclosure is required only if prices have declined since the date of the order.

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