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Inventory Treatment Under U.S. GAAP |
IFRS Inventory Treatment |
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Allowable costing methods include FIFO, average cost, and LIFO
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LIFO costing is now banned under IFRS |
| No special rules for biological inventory (e.g., growing crops, livestock) |
IAS 41 on agriculture specifies use of fair value less estimated selling costs for biological assets, with changes in value reported in income
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Presentation at lower of cost or market required
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Presentation at lower of cost or net realizable value |
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Only in rare instances (mining of gold, etc.) is presentation at fair value in excess of cost permitted
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Certain defined situations, including agricultural products, for reporting at fair value in excess of actual cost |
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Certain costs (idle capacity, spoilage) cannot be added to overhead charge in inventory cost, conforming to IFRS rule
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Certain costs (idle capacity, spoilage) cannot be added to overhead charge in inventory cost |
| Lower of cost or market adjustments cannot be reversed |
Lower of cost or market adjustments must be reversed under defined conditions
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Recognition in interim periods of inventory losses from market declines that reasonably can be expected to be restored in the fiscal year not required
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Recognition in interim periods of inventory losses from market declines that reasonably can be expected to be restored in the fiscal year is required; guidance in the areas of disclosure and accounting for inventories of service providers offered
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