中级财务会计(双语)第四章.pptVIP

Chapter 4Inventories: Additional Issues Impairment of Inventories Impairment of inventories (存货的减值): the cost of inventories may not be recoverable. The value of the inventories drop below their historical cost. Inventory valuecost Impairment of Inventories How do we know we have an impairment of inventories? 如何判断存货存在减值迹象？ Impairment is incurred: If those inventories are damaged 被损坏 If inventories have become wholly or partially obsolete 部分或全部过时 If their selling prices have declined 市价下跌 If the estimated costs of completion or the estimated costs to be incurred to make the sale have increased. 估计的完工成本或估计的销售费用上涨 Impairment of Inventories When the impairment of inventories has incurred, we use LCM method to measure the inventories. LCM method: lower-of-cost-or-market method (成本与市价孰低法) Compare cost with current market value How to use LCM method What is the “cost”? “Cost” refers to the “cost of ending inventory” How to calculate the “cost of ending inv.”? “Cost of ending inventory” is calculated by specific identification, average cost, FIFO, LIFO method which were discussed in Chapter 3 How to use LCM method What is the “market value”? “Market value” refers to the “Net realizable value (NRV)” of inventories. How to calculate the “NRV”? Inventories held for sale 持有以备出售的存货 Such as finished goods (also called merchandising inventory) NRV=estimated selling price – disposal costs 可变现净值=估计售价–处置成本(销售费用及相关税费) How to use LCM method How to calculate the “NRV”? Inventories held for use in the production 持有用于生产的存货 Usually they are raw materials or work-in-process. Also called manufacturing inventory. NRV=estimated selling price – estimated costs of completion – disposal costs 可变现净值=估计售价–至完工时估计将要发生的成本–处置成本(销售费用及相关税费) Exercise P167 E4-2 (1) Calculate the NRV for each product. (2) Determine the inventory’s value for each product by applying the LCM method. Exercise P167 E4-2 Only the Product 2 is impaired. Adjusting Cost to Market When a company uses the LCM meth