Inventory Valuation

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Ramachandran K (Querist)
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12 May 2010 Hi:

Request for inventory valuation as per AS and US GAAP.

What is the significant difference?

Thanks & Regards,
Ramachandran.K

CA Pradeep Kumar Rajput

CA Pradeep Kumar Rajput (Expert)
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12 May 2010 in AS inventory are carried at lower of cost and net realizable value. FIFO and Weighted average method recognized for valuation and LIFO is Prohibited.....

In US GAAP inventory are carried at lower of cost and net realizable value. FIFO and Weighted average method recognized for valuation and LIFO is Prohibited. "however the US GAAP prohibits the reversal of subsequent increase in the value previously written down which is allowed in the IFRS."

the AS salient about such reversal.......

Rahul Gupta

Rahul Gupta (Expert)
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13 May 2010 Agreed with Mr Pradeep.
Similarly, difference b/w IFRS and US GAAP >
1. US GAAP allows LIFO method, IFRS does not.
2. IFRS allows reversal of Inventory write down, US GAAP does not.

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