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November 25, 2022

INVENTORIES: ADDITIONAL VALUATION ISSUES

INVENTORIES: ADDITIONAL VALUATION ISSUES

Last week we discussed different valuation methods and cost flow assumptions. Of course we were making some basic assumptions, i.e., that the inventory was still worth at least what the company paid. But what happens if the inventory is damaged or spoiled? becomes obsolete? Shouldn’t that affect the valuation?

Research and discuss differences between GAAP and iGAAP in the ways impairment is handled.

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