O'Reilly logo

Wiley IFRS 2014: Interpretation and Application of International Financial Reporting Standards by Brandon Hanekom, Blaise Colyvas, Raymond Chamboko, Edwin Selbst, Tapiwa Njikizana, Danie Coetsee, Bruce Mackenzie

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Chapter 8INVENTORY

  1. INTRODUCTION
  2. DEFINITIONS OF TERMS
  3. RECOGNITION AND MEASURMENT
    1. Basic Concept of Inventory Costing
    2. Ownership of Goods
      1. Goods in transit
      2. Consignment sales
      3. Right to return purchases
    3. Accounting for Inventories
    4. Valuation of Inventories
      1. Joint products and by-products
      2. Direct costing
      3. Differences in inventory costing between IFRS and tax requirements
  4. METHODS OF INVENTORY COSTING UNDER IAS 2
    1. Specific Identification
    2. First-In, First-Out (FIFO)
    3. Weighted-Average Cost
    4. Net Realizable Value
      1. Recoveries of previously recognized losses
    5. Other Valuation Methods
      1. Retail method
      2. Standard costs
      3. Fair value as an inventory costing method
    6. Other Cost Topics
      1. Inventories valued at net realizable value
      2. Inventories valued at fair value less costs to sell
    7. Disclosure Requirements
  5. EXAMPLES OF FINANCIAL STATEMENT DISCLOSURES
  6. US GAAP COMPARISON

INTRODUCTION

The accounting for inventories is a major consideration for many entities because of its significance on both the statement of profit or loss (cost of goods sold) and the statement of financial position. Inventories are defined by IAS 2 as items that are

held for sale in the ordinary course of business; in the process of production for such sale; or in the form of materials or supplies to be consumed in the production process or in the rendering of services.

The complexity of accounting for inventories arises from several factors:

  1. The high volume of activity (or turnover) in the account;
  2. The various cost flow alternatives that ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required