Accounting for Inventories

Highlights

Introduction, Cost Basis of Inventory - Initial Measurement, Inventory Accounting Systems and Period-End Inventory Physical Count, Cost Flow Methods, Inventory Measurement in the Financial Statements, Gross Profit Method

Prerequisites

None

Objectives

After completing this course, you will be able to (1) identify the components of the cost basis of inventory for a retailer and a manufacturer, and determine which costs should be capitalized and which should be expensed; (2) distinguish between perpetual and periodic inventory accounting systems; (3) identify which items should be included in year-end inventory; (4) apply the first-in, first-out (FIFO); last-in, first-out (LIFO); and average cost flow methods for inventories; (5) measure the inventory subsequent to initial recognition in the annual and interim financial statements; (6) apply the gross profit method to estimate the balances of inventories and cost of goods sold; and (7) recognize the main differences between U.S. GAAP and IFRS in relation to inventory costing and measurement.