Specific identification of cost means that specific costs are attributed to identified
items of inventory. This is an appropriate treatment for items that are segregated for a
specific project, regardless of whether they have been bought or produced. However,
specific identification of costs is inappropriate when there are large numbers of items
of inventory which are ordinarily interchangeable. In such circumstances, the method
of selecting those items that remain in inventories could be used to obtain
predetermined effects on the net profit or loss for the period.