如题

问题如下：

Question

An analyst gathers the following information (in € thousands) about an electronics manufacturing company's inventory:

The inventory (in € thousands) is carried on the balance sheet at:

选项：

A.3,100.00 B.3,200.00 C.3,300.00

解释：

Solution

1. Incorrect because it assumes the company reports under US GAAP and uses the LIFO inventory valuation method; and takes the lower limit of market value (i.e., net realizable value less a normal profit margin) instead of current replacement cost. Accordingly, Min(Cost; Net realizable value less a normal profit margin) = Min(3,600; 3,100) = 3,100.

2. Incorrect because it assumes the company reports under US GAAP and uses the LIFO inventory valuation method. Under US GAAP, for inventories measured using LIFO and retail inventory methods, market value is defined as current replacement cost [3,200] subject to upper and lower limits. Market value cannot exceed net realizable value [3,300] (selling price less reasonably estimated costs of completion and disposal). The lower limit of market value is net realizable value less a normal profit margin [3,100]. Accordingly, Min(Cost; Market value) = Min(3,600; 3,200) = 3,200.

3. Correct because IFRS state that inventories shall be measured (and carried on the balance sheet) at the lower of cost and net realizable value. Accordingly, Min(Cost; Net realizable value) = Min(3,600; 3,300) = 3,300.

Analysis of Inventories

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