标题: FRA Inventory Write down question [打印本页] 作者: yuoska 时间: 2013-5-3 09:51 标题: FRA Inventory Write down question
Hi guys,
Here is the question I cannot understand. Here you go.
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The following information is avaiable about a manufacturing company:
Cost of ending inventory computed using FIFO, 4.3m
Net Realizable value 4.1m
Current Replacement Cost 3.8 m
If the company is using IFRS, instead of GAAP, its COGS is most likely;
A. 0.3 lower
B. the same,
C. 0.3 higher.
My rationale is, carrying value Net Realizable Value, so write down the original carrying value to Net realizable value, then COGS will not be affected.
ANS: C
Please help guys!
Thank you!作者: kim226 时间: 2013-5-3 09:53
First, I’m pretty sure the answer is A. Not C.
Second, write-downs on inventory are expensed as COGS.
Does that bridge the gap for you?
