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IAS 2 allows for two methods of costing, the standard technique and the retail technique. The standard technique requires that inventory be valued at the standard cost of each unit; that is, the usual cost per unit at the normal level of output and efficiency.
IAS 2: Valuation and Presentation of Inventories in the Context of the Historical Cost System (1975) Inventories (1993) 1976 January 1, 1976: IAS 3: Consolidated Financial Statements 1976 January 1, 1977: January 1, 1990: IAS 27 and IAS 28: IAS 4: Depreciation Accounting 1976 January 1, 1977: July 1, 1999: IAS 36: IAS 5: Information to Be ...
In addition research and development expenses can only be recognised as an intangible asset if they cross the threshold of being classified as 'development cost'. [22] Whilst the standard on provisions, IAS 37, prohibits the recognition of a provision for contingent liabilities, [23] this prohibition is not applicable to the accounting for ...
Her cost of goods sold depends on her inventory method. Under specific identification, the cost of goods sold is 10 + 12, the particular costs of machines A and C. If she uses FIFO, her costs are 20 (10+10). If she uses average cost, her costs are 22 ( (10+10+12+12)/4 x 2). If she uses LIFO, her costs are 24 (12+12).
Several standards contained alternative treatments (options), reflecting the diversity of practice. For instance, IAS 2 Valuation and Presentation of Inventories in the Context of the Historical Cost System (1975) allowed a variety of practices including the LIFO, FIFO and base stock methods.
IFRS 9 began as a joint project between IASB and the Financial Accounting Standards Board (FASB), which promulgates accounting standards in the United States. The boards published a joint discussion paper in March 2008 proposing an eventual goal of reporting all financial instruments at fair value, with all changes in fair value reported in net income (FASB) or profit and loss (IASB). [1]
A chart of accounts (COA) is a list of financial accounts and reference numbers, grouped into categories, such as assets, liabilities, equity, revenue and expenses, and used for recording transactions in the organization's general ledger.
It is standard under the historical cost basis to report the cost of inventory (stock) at the lower of cost and net realisable value. [2] As a result:- A decrease in the realisable value of inventory to an amount below its historical cost is recognised immediately [3]