BOP Program Statement 8561.05 § 8

a. Disposition. Items approved as Code 6 are moved to a separate physical location in the

warehouse. They are moved in the FPI financial information system to the EXOB location

pending disposition, using the FPI financial information system goods movement 311

transaction.

Concurrently, the Business Manager or the Accountant records the movement through a ledger

entry by debiting the Damaged/Obsolete expense account (613600 for raw materials, 613700 for

finished goods and subassemblies). The offsetting account is the allowance account (151900 for

raw materials, 153000 for finished goods, 158700 for subassemblies).

Example:

Journal Entry

DEBIT

603600 Damaged/Obsolete Property $5,000

Raw Materials

8561.05 6/22/2026 PROPERTY OF US GOVERNMENT 6

CREDIT

151900 Allowance for Obsolete Inventory $5,000

Raw Materials

The FPI financial information system text field contains the following description for the entries

for the EXOB movements:

 RM EXOB (for Raw Materials).

 FG EXOB (for Finished Goods).

 SA EXOB (for Subassemblies).

Note: Do not include the parenthetical guidance listed above in the text field when making the

entries.

The total value of the EXOB locations (ROH, FERT, and HALB) must reconcile to the

corresponding general ledger values (151900, 153000, and 158700), which are designated with

the appropriate text for EXOB. While individual values may fluctuate due to rounding or moving

average pricing, the total EXOB value per location must not exceed the Controller-approved

EXOB total.