gross

问题如下：

Q. Ignoring any tax effect, the change in net realizable value of the black licorice jelly beans from 2017 to 2018 will most likely result in:

选项：

A.an increase in gross profit of CHF7,775. B.an increase in gross profit of CHF11,670. C.no impact on cost of sales because under IFRS, write-downs cannot be reversed.

解释：

A is correct. Gross profit will most likely increase by CHF7,775. The net realizable value has increased and now exceeds the cost. The write-down from 2017 can be reversed. The write-down in 2017 was 9,256 [92,560 × (4.05 – 3.95)]. IFRS require the reversal of any write-downs for a subsequent increase in value of inventory previously written down. The reversal is limited to the lower of the subsequent increase or the original write-down. Only 77,750 kilograms remain in inventory; the reversal is 77,750 × (4.05 – 3.95) = 7,775. The amount of any reversal of a write-down is recognized as a reduction in cost of sales. This reduction results in an increase in gross profit.