Valuation of Inventories: A Cost-Basis Approach

Feb 01, 2014

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1. Introduction. DefinitionAssets held for sale in the ordinary course of business or goods that will be consumed in productionImportanceCost of inventoryall expenditures necessary in acquiring goods and converting them to saleable conditionCutoffWho owns inventory if ?sale" is a(an)product

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Valuation of Inventories: A Cost-Basis Approach

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Inventories: Additional Valuation Issues

Inventories: Additional Valuation Issues Chapter 9 Learning Objectives Apply the lower-of-cost-or-market rule. Recoding a Decline in Market Value (2 methods) Purchase commitments Gross profit method of Estimating Inventory Retail inventory method With markups and markdowns

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Inventories: Additional Valuation Issues

Inventories: Additional Valuation Issues. Objectives of this Chapter. I. Introduce Inventory estimation methods: the gross profit method and the retail inventory method. II. Determine ending inventory cost by applying the gross profit method.

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inventories: additional valuation issues

Apply the lower-of-cost-or-market rule.Recoding a Decline in Market Value (2 methods)Purchase commitmentsGross profit method of Estimating InventoryRetail inventory method With markups and markdownsValuation using relative sales value method. Learning Objectives. Lower-of-Cost-or-Market. INVENTORY: Benefit or utility derives from the ultimate sale of the goods. .

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Valuation of Inventories: A Cost-Basis Approach

Valuation of Inventories: A Cost-Basis Approach. Chapter 8. Learning Objectives. Identify major classifications of inventory. Distinguish between perpetual and periodic inventory systems. Identify the effects of inventory errors on the financial statements.

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Inventories: Additional Valuation Issues

Inventories: Additional Valuation Issues. Chapter 9. Learning Objectives. Describe and apply the lower-of-cost-or-market rule. Explain when companies value inventories at net realizable value. Explain when companies use the relative sales value method to value inventories.

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Chapter 8 VALUATION OF INVENTORIES: A COST-BASIS APPROACH Sommers – Intermediate I

Chapter 8 VALUATION OF INVENTORIES: A COST-BASIS APPROACH Sommers – Intermediate I. Discussion Question. Q8-6 Goods out on approval to customers Goods in transit that were recently purchased f.o.b. destination Land held by a realty firm for sale R aw Materials

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Cost of Capital & valuation

Cost of Capital & valuation. By jennifer kellner (Discount, Variety Stores Industry). Discount, Variety stores industry. Target Dollar General Wal-Mart Costco. *Costco is least comparable. Objective. To calculate the Cost of Capital for Enterprise Operations at Target (WACC) Using:

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Inventories and Cost of Goods Sold

Inventories and Cost of Goods Sold. CHAPTER 7. Learning Objectives. After studying this chapter, you should be able to Link inventory valuation to gross profit Use both perpetual and periodic inventory systems Calculate the cost of merchandise acquired

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Inventories and Cost of Goods Sold

Chapter 12. Inventories and Cost of Goods Sold. The valuation of goods on hand and in process often presents complex and difficult issues Determining the quantities of inventories may require specialized techniques Inventories often represent the largest current asset of a company

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A Philosophical Basis for Valuation

A Philosophical Basis for Valuation. A philosophical basis for Valuation. Many investors believe that the pursuit of 'true value ' based upon financial fundamentals is a fruitless one in markets where prices often seem to have little to do with value.

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COST BASIS

COST BASIS. Recent Events. Proposed Regs filed 12/16 published 12/17 Comments were due Feb. 8 th Public hearing Feb. 17 th

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Valuation of Inventories: A Cost-Basis Approach

Valuation of Inventories: A Cost-Basis Approach. JOIN KHALID AZIZ. ECONOMICS OF ICMAP, ICAP, MA-ECONOMICS, B.COM. FINANCIAL ACCOUNTING OF ICMAP STAGE 1,3,4 ICAP MODULE B, B.COM, BBA, MBA & PIPFA. COST ACCOUNTING OF ICMAP STAGE 2,3 ICAP MODULE D, BBA, MBA & PIPFA. CONTACT: 0322-3385752

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Chapter 8 VALUATION OF INVENTORIES: A COST-BASIS APPROACH Sommers – ACCT 3311

Chapter 8 VALUATION OF INVENTORIES: A COST-BASIS APPROACH Sommers – ACCT 3311. Discussion Question. Q8-6 Goods out on approval to customers Goods in transit that were recently purchased f.o.b. destination Land held by a realty firm for sale R aw Materials

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Inventories and Cost of Sales

Inventories and Cost of Sales. Chapter. 6. Determining Inventory Items. Merchandise inventory includes all goods that a company owns and holds for sale, regardless of where the goods are located when inventory is counted. Items requiring special attention include:. Goods in Transit.

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Inventories and Cost of Sales

Inventories and Cost of Sales. Chapter. 6. Learning objectives. 1. Basics of Inventory 2. Inventory costing under a perpetual system Specific identification, FIFO, LIFO, weighted average 3. Inventory valuation and effect of inventory error LCM principle 4. Decision analysis:

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INVENTORIES AND COST OF GOODS SOLD

Chapter 8. INVENTORIES AND COST OF GOODS SOLD. Goods owned and held for sale to customers. Current asset. Inventory Defined. Inventory. BALANCE SHEET. Asset. Inventory. INCOME STATEMENT. Revenue. Cost of goods sold. Gross profit. Expenses. Net income.

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Cost of Sales and Inventories

6. Cost of Sales and Inventories. Part One: Financial Accounting. The McGraw-Hill Companies, Inc., 1999. Available for sale $11,400. Purchases $7,400. Cost of goods sold $?. Merchandise Inventory and Flows. Slide 6-1. Ending inventory. $?. Beginning inventory. $4,000.

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Valuation of Inventories( AS-2)

Valuation of Inventories( AS-2). Purpose: To formulate the method of valuation of inventories on hand for Balance Sheet purposes. Inventories include: Finished goods held for sale in the ordinary course of business. Raw material/WIP in the process of production of such sale.

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Inventories and Cost of sales

Inventories and Cost of sales. BUS320 Fall 2010. Inventory. Definition of Inventory: Inventories are “assets: held for sale in the ordinary course of business; in the process of production for such sale; or

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Inventories: Special Valuation Issues

C. 8. hapter. Inventories: Special Valuation Issues. Objectives. 1. Understand the lower of cost or market method. 2. Explain the conceptual issues regarding the lower of cost or market method. 3. Understand purchase obligations and product financing arrangements.

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Valuation of Inventories Issues

PART II: Corporate Accounting Concepts and Issues. Lecture 10. Valuation of Inventories Issues. Instructor Adnan Shoaib. Learning Objectives. Identify major classifications of inventory. Distinguish between perpetual and periodic inventory systems.

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Presentation Transcript

Inventories: Additional Valuation Issues

Inventories: Additional Valuation Issues

inventories: additional valuation issues

Valuation of Inventories: A Cost-Basis Approach

Inventories: Additional Valuation Issues

Chapter 8 VALUATION OF INVENTORIES: A COST-BASIS APPROACH Sommers – Intermediate I

Cost of Capital &amp; valuation

Inventories and Cost of Goods Sold

Inventories and Cost of Goods Sold

A Philosophical Basis for Valuation

COST BASIS

Valuation of Inventories: A Cost-Basis Approach

Chapter 8 VALUATION OF INVENTORIES: A COST-BASIS APPROACH Sommers – ACCT 3311

Inventories and Cost of Sales

Inventories and Cost of Sales

INVENTORIES AND COST OF GOODS SOLD

Cost of Sales and Inventories

Valuation of Inventories( AS-2)

Inventories and Cost of sales

Inventories: Special Valuation Issues

Valuation of Inventories Issues

Cost of Capital & valuation