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- 2011-7-11
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15#
发表于 2011-7-13 14:22
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cpk123 Wrote:
-------------------------------------------------------
> Fixed Assets PPE ->
> Current Rate Method - Current Rate
> Temporal Method -> Historic Rate
>
> Depreciation:
> Current Rate Method -> average
> Temporal -> Historic
>
> Inventory
> Many variances/nuances here:
> Current Rate
> -----------------
> End Inventory-> Current Rate (On B/S0
> COGS -> on I/S -> Average Raet
>
> Temporal Method (All nuances are here)
> --------------------------------------------------
>
> Ending Inventory -> Historic Rate (also depends on
> Flow assumption)
> FIFO -> Latest inventory present in the End
> Inventory. So Historic Rate is actually the
> CURRENT Rate.
> LIFO -> Old pieces are present in Ending
> Inventory. So Historic Rate is the real HISTORIC
> Rate.
> Wt. Avg -> No issues here - use Wt. Avg Rate.
>
> COGS
> FIFO -> Old pieces have been used in COGS. So
> Historic Rate is the real HISTORIC Rate.
> LIFO -> Latest inventory present in the COGS. So
> Historic Rate is actually the CURRENT Rate.
> Wt. Avg -> No issues here - use Wt. Avg Rate.
CPK--Great summary. I agree totally. One additional point/comment. If we are given FIFO or LIFO assumption but are additionally told the inventory is purchased and sold evenly throughout the year, I think we are to use the average rate. It seems that his comment supersedes the FIFO/LFO assumption. I discovered this yesterday when doing Schweser Exam 1AM, and posted about it yesterday. Basically the average rate is used in question 16 although FIFO is given, because of the even purchase throughout the year. |
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