Question
i.Under both the LIFO and FIFO methods, the company's ending inventory had a historic cost of $300,000 at 12/31/2020. The U.S GAAP financials used the
i.Under both the LIFO and FIFO methods, the company's ending inventory had a historic cost of $300,000 at 12/31/2020. The U.S GAAP financials used the LIFO method, and reported an impairment loss on inventory within the calculation net income for 2020. The IFRS financials should use the IAS 2 FIFO method of valuing ending inventory.
The impairment losses should be calculated using the following inventory data:
Historic cost of inventory (under both LIFO and FIFO)
$620,000
Replacement cost
$500,000
Selling price
$600,000
Costs to finish and sell
$80,000
Normal profit margin
10%
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