Thus, in most cases, the UICRs system must be operated in addition to the one used for GAAP if the regular method is to be used.
Firms should consider designing a dual-purpose ABC system that also accommodates the UICRs, as ABC and the UICRs are substantially similar in regard to what should be capitalized as inventory costs.
The UICRs take a comprehensive approach to the capitalization of production costs, capitalizing all manufacturing and other supports costs related to the production of inventory.
Table 1 compares the treatment of costs under the UICRs with that of ABC.
The UICRs Category Two consists of costs that are not inventoriable.
Thus, it is not likely that the need for an allocation system to satisfy the UICRs will result in an ABC system being added as an after-thought.