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Analysis of Simplification of Accounting Initiative for Inventory and Update of Other Simplification Proposals
Author(s) -
Penner James,
Kreuze Jerry,
Langsam Sheldon
Publication year - 2016
Publication title -
journal of corporate accounting and finance
Language(s) - English
Resource type - Journals
eISSN - 1097-0053
pISSN - 1044-8136
DOI - 10.1002/jcaf.22155
Subject(s) - fifo and lifo accounting , accounting , accounting standard , financial accounting , business , accounting information system , quality (philosophy) , accounting method , fair value , value (mathematics) , management accounting , inventory valuation , computer science , fifo (computing and electronics) , philosophy , epistemology , machine learning , computer hardware
This article examines Accounting Standards Update 2015‐11, Simplifying the Measurement of Inventory . Through the accounting simplification initiative, the Financial Accounting Standards Board is reviewing areas of U.S. generally accepted accounting principles (GAAP) that can be simplified while still maintaining high‐quality accounting standards. Under this new standard, companies will be required to value inventory using the lower of cost or net realizable value. Companies using the last‐in, first‐out (LIFO) and retail inventory methods will be scoped out of applying the new standard. © 2016 Wiley Periodicals, Inc.