Sec. 146.94  Records concerning establishment of manufacturing period.

    (a) Feedstock admitted into the refinery subzone. The operator must 
maintain appropriate inventory records during the manufacturing period 
to substantiate the feedstock(s) eligible for attribution under 
Sec. 146.93(b) and in accordance with the operator's selected 
attribution method.
    (b) Final product consumed in or removed from subzone. The operator 
must record the date and amount of each final product consumed in, or 
removed from the subzone.
    (c) Consumption or removal. The consumption or removal of a final 
product during a week may be considered to have occurred on the last day 
of that week for purposes of attribution and relative value calculation 
instead of the actual day on which the removal or consumption occurred, 
unless the refiner elects to attribute using the FIFO method (see 
section II of the appendix to this part).
    (d) Gain or loss. A gain or loss that occurs during a manufacturing 
period must be taken into account in determining the attribution of a 
final product to a feedstock and the relative value calculation of 
privileged foreign feedstocks. Any gain in a final product attributed to 
a non-privileged foreign status feedstock is dutiable if entered for 
consumption unless otherwise exempt from duty.
    (e) Determining gain or loss; acceptable methods.--(1) Converting 
volume to weight. Volume measurements may be converted to weight 
measurements using American Petroleum Institute conversion factors to 
account for gain or loss.
    (2) Calculating feedstock factor to account for volume gain or loss. 
A feedstock factor may be calculated by dividing the value per barrel of 
production per product category by the quotient of the total value of 
production divided by all feedstock consumed. This factor would be 
applied to a finished product that has been attributed to a feedstock to 
account for volume gain.
    (3) Calculating volume difference. Volume difference may be 
determined by comparing the amount of feedstocks introduced for a given 
period with the amount of final products produced during the period, and 
then assigning the volume change to each final product proportionately.