Inventory is a detailed list of assets or property that are currently in possession or available for use. In a business context, inventory typically refers to the total amount of goods or products that a company has on hand and available for sale or use.
Under Article 9 of the Uniform Commercial Code (UCC), "inventory" refers to goods, materials, and other property that are held for sale or lease, or that are used or consumed in a business's operations. Specifically, inventory is a type of collateral that can be pledged by a debtor to secure a loan or other obligation.
Article 9 provides detailed rules for creating and enforcing security interests in inventory, including requirements for proper filing and notice to interested parties. A creditor who has a valid security interest in a debtor's inventory may have priority over other creditors in the event of the debtor's default or bankruptcy.
[Last updated in March of 2023 by the Wex Definitions Team]