The following information is available for a manufacturing company:
$ millions
Cost of ending inventory computed using FIFO 4.3
Net realizable value 4.1
Current replacement cost 3.8
If the company is using International Financial Reporting Standards (IFRS) instead of US GAAP, its cost of goods sold (in millions) is most likely:
- $0.3 higher.
- $0.3 lower.
- the same.
Solution
Solution
C is correct. Under both IFRS and US GAAP, the inventory would be written down to its net realizable value ($4.1 million); therefore, the costs of goods sold would be the same. There are some exceptions under US GAAP for inventory valued using the retail method, which would not apply to a manufacturing company or for inventory valued under LIFO.
A is incorrect. The write-down is same under US GAAP and IFRS.
B is incorrect. The write-down is same under US GAAP and IFRS.
这道题在美准下，rc和nrv相比较，这道题rc小于nrv，但是又没有给出normal profit margin ,如何判断美准下应该调整到的价值，官网解析里，说不论美准还是国际准则下，都应该是4.1，国际准则我能理解，但是美准怎么判断的。
