When does title transfer under FOB Shipping Point terms?

Under FOB Shipping Point terms, title to the goods transfers from the seller to the buyer when the goods leave the seller's warehouse. This means that the buyer assumes ownership and the associated risks and responsibilities as soon as the goods are shipped. This is an important concept in accounting and logistics, as it clarifies when the buyer can recognize the inventory and when the seller can recognize the revenue from the sale.

This transfer of title is significant because it affects when the buyer can record the inventory in their accounting records and when the seller can record the sale. It also emphasizes the importance of understanding shipping terms in transaction agreements, as they determine responsibilities related to shipping costs, liabilities, and risks involved with the goods in transit.