Professional Research: FASB Codification

Chapter 9, page 525

NU's student FASB Codification ID and Password (and website address) are located under the "Course Resources" link in the course.

BRIDGE TO THE PROFESSION

Codification Research Case

Jones Co. is in a technology-intensive industry. Recently, one of its competitors introduced a new product with technology that might render obsolete some of Jones's inventory. The accounting staff wants to follow the appropriate authoritative literature in determining the accounting for this significant market event.

Instructions

If your school has a subscription to the FASB Codification, go to https://asc.fasb.org/ to log in and prepare responses to the following. Provide Codification references for your responses.

(a) Identify the primary authoritative guidance for the accounting for inventories.

(b) List three types of goods that are classified as inventory. What characteristic will automatically exclude an item from being classified as inventory?

(c) Define market as used in the phrase lower-of-cost-or-market.

(d) Explain when it is acceptable to state inventory above cost and which industries allow this practice.