As the Mayo Clinic was rolling out its response to the coronavirus pandemic, its finance team was trying to figure out how best to classify a reserve of masks and gloves: expense or inventory? The Mayo Clinic ran into the question of how to account for protective gear after it purchased a stockpile from late February to early March. Previously, the hospital system had recognized gear as inventory if it was stored in a warehouse; if the gear were kept at a clinical facility or on a hospital floor, it would be recognized as an expense. The finance team argued that such equipment should be considered inventory even if it weren’t in a warehouse. “They shouldn’t have been expensed.” Do you agree? Why or why not? 

How would the inventory vs expense classification affect Mayo Clinic’s financial statements?

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Answer As the Mayo Clinic was rolling out its response to the coronavirus pandemic its finance team ... View the full answer