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CFA Level 1 - Inventory Valuation
INVENTORY VALUATION

Inventory Valuation
GAAP requires inventory to be valued at the lower of cost to market. LCM can be calculated by using the item-by-item method or the major-category method.

1. The item-by-item method – This methods will look at each item and determine the LCM.

Example: 


2.The major-category method – Under this method, each category is grouped and the lower of the cost to market is taken.

Example – Assume that our prior example represents a category.
 


Under this method the LCM should be $850.
Next: CFA Level 1 - Inventory Analysis

Table of Contents
1) CFA Level 1 - Chapter 8: Assets
2) CFA Level 1 - Choosing the Appropriate Accounting Method
3) CFA Level 1 - Accounting for Credit Transactions
4) CFA Level 1 - Basics of Inventories
5) CFA Level 1 - Effects of Misstated Inventory
6) CFA Level 1 - Inventory Valuation
7) CFA Level 1 - Inventory Analysis
8) CFA Level 1 - Converting LIFO to FIFO
9) CFA Level 1 - Converting FIFO to LIFO
10) CFA Level 1 - Effects of Inventory Accounting
11) CFA Level 1 - Causes a Decline in LIFO Reserve
12) CFA Level 1 - Long Term Asset Basics
13) CFA Level 1 - Depreciation Accounting
14) CFA Level 1 - Accelerated Depreciation
15) CFA Level 1 - Natural Recource Assets
16) CFA Level 1 - Effects of Capitalizing vs.Expensing
17) CFA Level 1 - Computing the Effect of Capitalizing vs. Expensing
18) CFA Level 1 - Capitalizing Intangible Assets
19) CFA Level 1 - Depreciation
20) CFA Level 1 - Fixed Asset Disclosures
21) CFA Level 1 - Asset Impairment
22) CFA Level 1 - SFAS 143 Requirements
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