Common use of Accounting segregation Clause in Contracts

Accounting segregation. 1. For the purpose of establishing if a product is originating when in its manufacture are utilized originating and non- originating fungible materials, mixed or physically combined, the origin of such materials can be determined by any of the inventory management methods applicable in the Party. 2. Where considerable cost or material difficulties arise in keeping separate stocks of originating and non-originating materials which are identical and interchangeable, the so-called "accounting segregation" method may be used for managing such stocks. 3. This method must be able to ensure that the number of products obtained which could be considered as "originating" is the same as that which would have been obtained if there had been physical segregation of the stocks. 4. This method is recorded and applied on the basis of the general accounting principles applicable in the Party where the product was manufactured. 5. The user of this method may issue or apply for proofs of origin providing information about the inventory management method used, as the case may be, for the quantity of products which may be considered as originating. The management method selected for a particular fungible material or material shall continue to be used for that good or material throughout the fiscal year of the person that selected the inventory management method.