#29 Inventories, Long-lived Assets, Income Taxes, and Non-current Liabilities

Question 1

inventory: what is in its cost?

Answer 1

“purchase cost, conversion costs, and other costs necessary to bring the inventory to its present location and condition”

Question 2

Inventory: what is expensed as incurred?

Answer 2

“Period costs, such as abnormal waste, most storage costs, administrative costs, and selling costs”

Question 3

“ending inventory values and COGS are the same with periodic or perpetual system is used” with LIFO, FIFO, Weight Ave, Spec Ident?

Answer 3

FIFO and specific identification

Question 4

how are inventories valued under IFRS?

Answer 4

net realizable value or lower of cost

Question 5

LIFO or FIFO allows inventory write ups?

Answer 5

LIFO, but only to extend of last net realizable value.

Question 6

how are inventories valued under GAAP?

Answer 6

lower of cost or market (market usually = replacement cost. cannot exceed net realizable value)