What your imported goods actually cost

A business imports a container of goods invoiced at USD 40,000. The supplier invoice is entered, stock is valued at the converted taka figure, and the goods go on sale. Three months later the accounts show a margin nobody believes. The reason is almost always the same: the cost of getting the goods into the warehouse was never added to the goods.

What belongs in landed cost

Under IAS 2, the cost of inventory includes purchase price plus import duties and other non-recoverable taxes, transport, handling and other costs directly attributable to acquisition. In practice, for a Bangladesh importer, that means:

• Supplier invoice value, converted at the rate applicable to the transaction
• Ocean or air freight
• Marine insurance
• Customs duty, regulatory duty and supplementary duty — the non-recoverable ones
• Port charges, demurrage and container detention where incurred
• C&F agent fees and documentation charges
• Inland transport from port to warehouse
• LC opening commission, margin-related bank charges and amendment fees

What does not belong: recoverable VAT (that is a receivable, not a cost), selling and distribution costs incurred after the goods reach the warehouse, and general administrative overhead.

The timing problem

Landed cost has an awkward property: the goods arrive before all the costs do. The C&F agent's final bill may come weeks after the container has been unpacked and some of the stock already sold. This is the practical reason most businesses give up on landed costing — by the time you know the cost, the moment to apply it has passed.

There are two workable responses. Accrue an estimate at receipt and true it up when the final bills arrive, or hold the consignment in a separate in-transit or pending-costing state until costs are complete. The first is better for businesses that turn stock quickly; the second is cleaner but delays availability.

Allocating across items

A container rarely holds one product. Once you have the total cost to allocate, you need a basis. The three common ones:

The important refinement: different cost elements deserve different bases. Freight tracks weight or volume. Duty tracks assessed value. Applying one basis to the whole pool is simpler and is usually close enough for goods of similar character, but it is visibly wrong when a consignment mixes, say, machinery and packaging material.

A worked example

Consignment of two products, invoice value BDT 4,400,000 total. Product A is 3,300,000 (75%) and 800 kg. Product B is 1,100,000 (25%) and 2,400 kg.

• Customs duty of BDT 620,000 allocated by value: A takes 465,000, B takes 155,000
• Freight and inland transport of BDT 180,000 allocated by weight: A takes 45,000 (25% of 3,200 kg), B takes 135,000
• C&F, port and bank charges of BDT 95,000 allocated by value: A takes 71,250, B takes 23,750
• Landed cost: A = 3,881,250 against invoice 3,300,000, an uplift of 17.6%. B = 1,413,750 against invoice 1,100,000, an uplift of 28.5%

Had a single value-based allocation been used throughout, product B would have absorbed roughly 68,000 less and product A roughly 68,000 more. On these margins that is the difference between B looking profitable and B looking marginal — which is exactly the kind of decision landed costing exists to inform.

What good looks like

You should be able to open a single import record and see the proforma invoice, the LC and its amendments, the shipping documents, every cost bill received against the shipment, what has been allocated and what is still estimated, and the resulting per-unit cost of each item received. If that information lives in four systems and a spreadsheet, the number you are reporting as inventory value is an assumption rather than a measurement.