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7 Cards in this Set
- Front
- Back
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How is inventory valued in GAAP and IFRS |
GAAP- LCM; median mkt ceiling, mkt floor, and RC (if RC is less than cost) IFRS- Lower of cost or NRV; NRV= SP- disposal costs; NRV is the same as mkt ceiling |
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Define: Dollar Value LIFO |
Inventory is measured in dollars and is adjusted for changes in price levels |
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Price Index= |
Ending Inventory @ current cost/ Ending Inventory @ base yr cost |
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NRV formula |
SP - cost to complete |
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Mkt Floor formula |
NRV - profit margin |
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IFRS Lower of Cost or NRV |
NRV= SP- cost to complete Cost= normal (not Replacement cost) |
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GAAP Steps for LCM |
1. Calc NRV, RC, MF 2. Choose middle 3. Compare middle to Historical cost; choose the lower |
