TASK 3:

The Changing Landscape for Island Solutions Island Solutions is a technology business that retails and wholesales computer hardware along with a wide variety of technology products and solution services. Recently, several competitors have entered the market and introduced new products that might drive some of the business inventory into obsolescence.

The company has always been IRFS compliant and wants to ensure that it follows the appropriate authoritative literature in determining the accounting for some significant market changes.

The accountant at Island Solutions has tasked two small teams of interns from ACCT2014 (2023 cohort) to conduct several pieces of research and dry-run practices.

Paragraph citations from the authoritative literature are to be provided with answers where applicable. Show all workings.

1. Under IFRS, what inventory accounting method(s) / cost flow assumption(s) is/are Island Solutions allowed to use and prohibited from using?