Goods Are on a Truck at Year-End. Who Owns Them?
Inventory ownership depends on the shipping terms and arrangement, not simply physical location.
FOB shipping point
Ownership generally transfers when the seller properly ships the goods, so the buyer can own inventory that has not arrived.
FOB destination
Ownership generally remains with the seller until the goods reach the specified destination.
Consignment
The consignor generally retains ownership until the goods are sold to an outside customer. The consignee does not record the goods as its own inventory merely because they are physically present.
Year-end cutoff
Create a timeline with shipment date, year-end, and delivery date, then identify who held title at year-end.
The takeaway
FOB shipping point generally transfers ownership at shipment. FOB destination generally transfers ownership at delivery. Consigned goods generally remain the consignor's inventory.
Related Summit guides
FAQ
Can inventory be owned before it arrives?
Yes.
Does a consignee own consigned goods?
Generally no.
Why does FOB matter for revenue?
Transfer timing can affect both inventory and revenue analysis.