1. The definitions in this section apply in this Schedule.

“FIFO method”

“FIFO method” means the method by which the value of non-originating materials, determined in accordance with subsection 4(2) of these Regulations, first received in materials inventory, is considered to be the value of non-originating materials used in the production of the good first shipped to the buyer of the good. (méthode PEPS)

“LIFO method”

“LIFO method” means the method by which the value of non-originating materials, determined in accordance with subsection 4(2) of these Regulations, last received in materials inventory, is considered to be the value of non-originating materials used in the production of the good first shipped to the buyer of the good. (méthode DEPS)

“materials inventory”

“materials inventory” means, with respect to a single plant of the producer of a good, an inventory of non-originating materials that are identical materials or fungible materials and that are used in the production of the good. (stock de matières)

“rolling average method”

“rolling average method” means the method by which the value of non-originating materials used in the production of a good that is shipped to the buyer of the good is based on the average value, calculated in accordance with section 4, of the non-originating materials in materials inventory. (méthode de la moyenne mobile)

2. The methods for determining the value of non-originating materials that are identical materials or fungible materials and that are referred to in subsection 4(3) of these Regulations are the following:

• a) FIFO method;

• b) LIFO method; and

• c) rolling average method.

• 3. (1) Where a producer of a good chooses, with respect to non-originating materials that are identical materials or fungible materials, any of the methods referred to in section 2, the producer may not use another of those methods with respect to any other non-originating materials that are identical materials or fungible materials, as the case may be, and that are used in the production of that good or in the production of any other good with respect to which a calculation under subsection 4(1) of these Regulations has been made.

• (2) Where a producer of a good produces the good in more than one plant, the method chosen by the producer shall be used with respect to all plants of the producer in which the good is produced.

• (3) The method chosen by the producer to determine the value of non-originating materials may be chosen at any time during the producer’s fiscal year and may not be changed during that fiscal year.

• 4. (1) The average value of non-originating materials that are identical materials or fungible materials and that are used in the production of a good that is shipped to the buyer of the good is calculated by dividing

  • a) the total value of non-originating materials that are identical materials or fungible materials, as the case may be, and that were in materials inventory before the shipment of the good, determined in accordance with subsection 4(2) of these Regulations,

  by

  • b) the total units of those non-originating materials in materials inventory prior to the shipment of the good.

• (2) The average value calculated under subsection (1) is applied to the remaining units of non-originating materials in materials inventory.