U.S. GAAP Codification of Accounting Standards

U.S. GAAP Codification   Accounting Standards, ASC

U.S. GAAP Accounting Standards
Codification Topic 330: Inventory

Principles of Accounting Intermediate Financial AccountingU.S. GAAP Textbook
Accounting by Topic Accounting Terms Dictionary

Codification Topic 330

Tangible personal property of the following:
1. held for sale --> merchandise, finished goods 
2. in the course of production --> work in process
3. to be consumed in the production --> raw materials

Initial measurement
Inventories are measured at cost when first recognized

Cost flow assumptions
One of the following assumptions is made to determine the cost of inventory:
1. First-in First-out (FIFO): Items that came in first are sold first
2. Last-in First-out (LIFO): Items that came in last are sold first
3. Average method: Weighted average cost is applied as unit cost

Retail inventory method is
--> allowed in some situations

Subsequent measurement
If the market is lower than the cost
--> inventory is measured at the market
--> "Lower of Cost or Market" (LCM)

1. The market refers to current replacement cost
2. If net realizable value (NRV) is lower that current replacement cost
--> NRV is the market
3. If current replacement cost is lower than (1)
--> (1) is the market
(1) net realizable value - normal profit margin

Lower of Cost or Market (LCM) summary
(a) current replacement cost
(b) net realizable value
(c) net realizable value - normal profit margin

If (c) < (a) < (b) --> market = (a)
If (c) < (b) < (a) --> market = (b)
If (a) < (c) < (b) --> market = (c)

   Codification Topic 330
Subtopics of Codification Topic 330
   330-10 Overall   
Accounting Terms of Codification Topic 330-10
   Direct effects of a change in accounting principle
   Net realizable value   

   Other Topics at the Codification 300 
Accounting Standards Codification, ASC, Overview
ASC Codification Topic 305: Cash and Cash Equivalents
ASC Codification Topic 310: Receivables
ASC Codification Topic 320: Investments-Debt and Equity Securities
ASC Codification Topic 323: Investments-Equity Method and Joint Ventures
ASC Codification Topic 325: Investments-Other
ASC Codification Topic 330: Inventory
ASC Codification Topic 340: Other Assets and Deferred Costs
ASC Codification Topic 350: Intangibles-Goodwill and Other
ASC Codification Topic 360: Property, Plant, and Equipment

   U.S. GAAP Codification of Accounting Standards
Accounting Standards Codification, ASC, Overview
ASC Codification 200: Presentation
ASC Codification 300: Assets
ASC Codification 400: Liabilities
ASC Codification 500: Equity
ASC Codification 600: Revenue
ASC Codification 700: Expenses
ASC Codification 800: Broad Transactions
ASC Codification 900: Industry

U.S. GAAP by Topic
Accounting Topics

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