| Goods are inventory if they are leased by a lessor or held by |
a person for sale or lease. The revised definition of |
"inventory" makes clear that the term includes goods leased by |
the debtor to others as well as goods held for lease. (The same |
result should have obtained under the former definition.) Goods |
to be furnished or furnished under a service contract, raw |
materials, and work in process also are inventory. Implicit in |
the definition is the criterion that the sales or leases are or |
will be in the ordinary course of business. For example, |
machinery used in manufacturing is equipment, not inventory, even |
though it is the policy of the debtor to sell machinery when it |
becomes obsolete or worn. Inventory also includes goods that are |
consumed in a business (e.g., fuel used in operations). In |
general, goods used in a business are equipment if they are fixed |
assets or have, as identifiable units, a relatively long period |
of use, but are inventory, even though not held for sale or |
lease, if they are used up or consumed in a short period of time |
in producing a product or providing a service. |