Wiley GAAP 2014: Interpretation and Application of Generally Accepted Accounting Principles

22   ASC 330 INVENTORY

Perspective and Issues

Subtopic

Scope

Overview

Definitions of Terms

Concepts, Rules, and Examples

Ownership of Goods

Goods in transit

Examples of goods in transit

Consignment arrangements

Example of a consignment arrangement

Product financing arrangements

Sales made with the buyer having the right of return

Accounting for Inventories

Initial Measurement - Valuation of Inventories

Raw materials and merchandise inventory

Example of recording raw material costs

Inventory hedges

Manufacturing inventories

Example of allocating fixed overhead to units produced

Example of variable and fixed overhead allocation

Determining inventory cost

Cost flow assumptions

First-in, first-out (FIFO)

Example of the basic principles involved in the application of FIFO

Last-in, first-out (LIFO)

Example of the single goods (unit) LIFO approach

Example 1 – Identifying Pools

Example 2 – Identifying Pools

Example 3 – Identifying Pools

Example of the dollar-value LIFO method

Example – link-chain method

Weighted-average and moving-average

Example of the weighted-average method

Comparison of cost flow assumptions

Lower of Cost or Market (LCM)

Example of the lower of cost or market calculation

Inventory estimation methods

Example of the cost-to-retail method

Example of the lower of cost or market rule – FIFO and average-cost methods

Example of the LIFO retail method

Example of standard costing

Other inventory valuation methods

Differences between GAAP and Income Tax Accounting for Inventories ...