Accounting for Inventories, FIFO, LIFO, NRV, International Financial Reporting Standards (IFRS), International Accounting Standards (IAS),

International Financial Reporting Standards (IFRS)
International Accounting Standards (IAS)

U.S. GAAP

IFRS, IAS

Accounting Topics

IFRS Accounting
Inventories

IFRS Dictionary, IFRS, IAS Timeline, IFRS Hedge Accounting

U.S. GAAP by Topic, IFRS, IAS by Topic, Accounting by Topic

International Financial Reporting Standards (IFRS)

IFRS Accounting for Inventories (IAS 2)

Initial measurement:
At the time of initial recognition,
--> inventories are measured at cost.

Measurement after initial recognition:
After initial recognition, inventories are measured
--> at the lower of cost or net realisable value (NRV).

U.S. GAAP:
After initial recognition, inventories are measured
--> at the lower of cost or market (LCM).

In general,
--> Market is current replacement cost.

If current replacement cost > net realizable value (NRV),
--> Market is net realizable value.

If current replacement cost < NRV - normal profit margin,
--> Market is NRV - normal profit margin.

Cost formula:
   FIFO (First-in, First-out) method is allowed.
   Weighted average method is allowed.
   LIFO (Last-in, First-out) is not allowed.

U.S. GAAP:
   FIFO (First-in, First-out) method is allowed.
   Weighted average method is allowed.
   LIFO (Last-in, First-out) is allowed.

IFRS Accounting for Assets