 hello in this lecture we will define consignee according to fundamental accounting principles wow 22nd edition at the definition of consignee is receiver of goods owned by another who holds them for purposes of selling them for the owner a couple things that can be confusing about this term one has to do with inventory in terms of who owns the inventory and who is holding the inventory the other has to do with which side of the consignment transaction we are on are we the person that is giving the inventory or are we the person that is receiving the inventory let's take a look at an example where we have a farmer this farmer makes wine so we have wine we're going to say that the farmer in this case is the consignee or meaning the farmer owns the wine however the farmer is going to give the wine in this case to a restaurant so the restaurant is holding on to the wine it looks kind of like it's the restaurant the consignee's inventory however it's not owned by the restaurant it's actually still owned by the owner even though it is now at the restaurant in location why would this happen because the restaurant then would be selling that wine to the end user the restaurant has the ability to display the wine maybe to have the wine tasting so that the end user can purchase the wine however when that purchase happens most of the revenue is going to go back to the owner rather than to the consignee and of course there would be some kind of negotiation for compensation between the owner and the consignee so this could be something that would be the case for wine such as this or if there are paintings artists in the area it could be that the display areas that are displaying the art might be somewhere like in a restaurant or some type of area that can be displayed where people can see the art but the owner of the art is going to be the consignee or the owner is going to be separate from where the location is that is in is where the art can be purchased