COMM 211 Lecture 5: Week 5 – Inventory & COGS
2 Dec 2017
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Document Summary
Items purchased by a company for resale to customers or to be used in the manufacturing of items to be sold to customers. Inventory is an asset on the statement of financial position. Recorded at cost when purchased: costs can include. Cost paid to get inventory ready to sell. The cost of the inventory that is sold is shifted into an expense on the income statement called cost of. Sales revenue is based on the sale price of the inventory sold ex. Cost of goods sold is based on the cost of the inventory sold ex. Ifrs requires inventory be reported in the statement of financial position: recorded at inventory"s cost or net realizable value (whichever is lower) Net realizable value = selling price associated selling cost. If inventory becomes obsolete, damaged or its selling price declines, we must write down inventory at the reporting date.
