UNIFORM CAPITALIZATION RULES Definition

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UNIFORM CAPITALIZATION RULES (UNICAP), in the U.S., is a method of valuing inventory for tax purposes that requires capitalization of direct costs, e.g. material and labor, and an allocable portion of indirect costs that benefit or are incurred because of production or resale activities. Certain expenses must be included in the basis of the property or in inventory costs rather than currently deducted. These costs are then recovered through depreciation or amortization or as cost of goods sold.

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UNDERWRITERS DISCOUNT is the differential between the price paid to the issuer for the new issue and the prices at which the securities are initially offered to the investing public.

TARGET MARGIN is the desired profit on each sale; used to determine the selling price where the average total cost is known.

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