tailieunhanh - Lecture Intermediate accounting: IFRS edition - Chapter 8: Inventories: Measurement

In this chapter we continue our study of assets by investigating the measurement and reporting inventories and the related expense – cost of goods sold. Inventory refers to the assets a company (1) intends to sell in the normal course of business, (2) has in production for future sale, or (3) uses currently in the production of goods to be sold. | INVENTORIES: MEASUREMENT Chapter 8 Chapter 8: Inventories: Measurement In this chapter we continue our study of assets by investigating the measurement and reporting inventories and the related expense – cost of goods sold. Inventory refers to the assets a company (1) intends to sell in the normal course of business, (2) has in production for future sale, or (3) uses currently in the production of goods to be sold. Recording and Measuring Inventory Merchandise Inventory Goods acquired for resale Manufacturing Inventory Raw Materials work-in-progress Finished Goods Types of Inventory We will look at inventory for two classes of businesses. Wholesale and retail companies purchase goods that are primarily in finished form. These companies are intermediaries in the process of moving goods from the manufacturer to the end-user. The cost of merchandise inventory includes the purchase price, import duties and taxes that are not recoverable by the company, plus any other costs necessary to get the goods in condition and location for sale. In manufacturing, companies actually produce the goods they sell to the wholesaler, retailer or other manufacturers. These companies normally have three inventories. The first is raw materials, which makes up the items that will be used in the production process. The second inventory is work-in-progress that consists of items being worked on, but not yet complete. Work-in-pro inventory includes the cost of raw materials used, and the cost of conversion. Conversion cost include the cost of labor that can be directly traced to the goods in process, and the allocated portion of other manufacturing costs, called manufacturing overhead. Overhead costs include electricity and other utility costs, depreciation of manufacturing equipment, and many other manufacturing costs that cannot be directly linked to the production of specific goods. Finished goods inventory consists of items that are available for sale. Manufacturing Inventories . | INVENTORIES: MEASUREMENT Chapter 8 Chapter 8: Inventories: Measurement In this chapter we continue our study of assets by investigating the measurement and reporting inventories and the related expense – cost of goods sold. Inventory refers to the assets a company (1) intends to sell in the normal course of business, (2) has in production for future sale, or (3) uses currently in the production of goods to be sold. Recording and Measuring Inventory Merchandise Inventory Goods acquired for resale Manufacturing Inventory Raw Materials work-in-progress Finished Goods Types of Inventory We will look at inventory for two classes of businesses. Wholesale and retail companies purchase goods that are primarily in finished form. These companies are intermediaries in the process of moving goods from the manufacturer to the end-user. The cost of merchandise inventory includes the purchase price, import duties and taxes that are not recoverable by the company, plus any other costs necessary to .