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As the Mayo Clinic was rolling out its response to the coronavirus pandemic, its finance...

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Accounting

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 in 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 werent in a warehouse. They shouldnt have been expensed. Do you agree? Why or why not? How would the inventory vs expense classificiation affect Mayo Clinics financial statements?

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