Inventory Accounting and Costing

1. Obtain up-to-date rules covering costing and accounting for inventory, and touch base with inventory cycles from purchase to sales.
2. Correctly recognize and measure inventory under International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP).
3. Properly account for write-downs, write-backs and impact of change in inventory accounting policies on financial statements.
4. Develop professional judgment in accounting for inventory not on hand.
5. Gain knowledge of different inventory cost-flow assumptions and how they affect the company’s financial position and income statement.
6. Report and disclose inventory accurately by adhering to internationally recognized conventions.
7. Understand inventory cost allocation techniques and cost accounting approaches.

Inventory professionals, including supervisors, account managers, purchasing and facility supervisors and coordinators, financial controllers, new employees handling inventory, internal auditors, warehouse assistants and managers, and operations managers. 

IIntroduction to Inventory:

1. Current Assets and Inventory Management
2. The Four Reasons for Keeping Inventory
3. Inventory Cycle from Purchases to Sales:

• Ordering and Receiving
• Sales and Delivery
• Best Practices in Count Process

1. Inventory Industry Types: Merchandise, Manufacturing, Construction and Real Estate
2. Differences between Inventory, Fixed Assets and Investment Properties
3. Understanding and Analyzing Inventory Ratios

Accounting for Inventory:

1. Perpetual versus Periodic Inventory Methods 

• Cost Accounting versus Financial Accounting

• Cost Allocation Techniques:
  • Direct Material, Direct Labor and Manufacturing Overhead
  • Cost of Purchase, Cost of Conversion and Treatment of Discounts and Rebates Received

• Initial Recognition

1. Measurement after Recognition

• Calculating “Net Realizable Value” (IFRS) 
• Calculating Market Price Under The “Lower of Cost or Market-LCM” Method (GAAP)
• Estimating and Booking Write-Downs for Slow-Moving and Obsolete Inventory
• Accounting for Write-Backs of Impairment Under IFRS and GAAP

1. Accounting for Errors Identified on Physical Count

Accounting for Inventory – Special Topics:

• Accounting for Inventory Not on Hand
• On Consignment
• Goods In-Transit: Defining Inco-Terms
• Sold with Right of Return
• Sold Subject to Installation and Inspection
• Sold on a “Bill-and-Hold” Basis
• The Concept of “Inventory Credit”: Inventory Used as Collateral to Raise Finance
• Impact of Accounting Policies Changes on Financial Statements 
• Inventory Required Disclosures

Inventory Cost Flow Assumptions:

• First-In First-Out (FIFO) and Last-In First-Out (LIFO)
• Weighted Average (WA) and Moving Average (MA)
• Specific Identification (SID)

Inventory Estimation and Cost Accounting Approaches:

• Inventory Estimation Techniques
  • Gross Profit Method
  • Retail Method
  • Cost Accounting Approaches
    • Traditional Costing versus Activity-Based Costing
    • Target Costing versus Cost-Plus Pricing Method
    • Standard Cost Accounting
    • Throughput Accounting
    • Using Excel for Efficient Analysis of Inventory
      • Consolidating your Inventory Data
      • Validating Data for Accuracy
      • Analyzing Slow Moving and Obsolete Inventory
      • Tests of Recalculating Weighted Average and Moving Average Costs
      • Using Pivot Tables to Efficiently Analyze and Report on Inventory Issues

• The Training lectures.
• The Group discussions.
• The Training Workshops.