Rev. Rul. 58-181

A taxpayer who, in accordance with accepted accounting practice, uses depreciation as part of inventory costs in determining gross income (Revenue Ruling 141, C.B. 1953-2, 101) must also treat as part of inventory costs that portion of amortization of emergency facilities, computed under section 168 of the Internal Revenue Code of 1954 (Section 124A of the 1939 Code), which is equal to depreciation on the facilities that would have been included in inventory costs had the facilities not been subject to amortization under section 168 of the Code. Any amortization in excess of depreciation constitutes a current allowable deduction from gross income. Such procedure permits income to be clearly reflected in accordance with the method of accounting consistently employed by the taxpayer and in accordance with accepted accounting practice.