Inventories
By Yuriy Smirnov Ph.D.
June 28, 2017The perpetual inventory system is used in accounting to keep inventory records. This system assumes that the inventory account and the cost of goods sold (COGS) account are updated after each transaction. Common examples of such transactions are purchase ...
read moreInventoriesBy Yuriy Smirnov Ph.D.June 23, 2017The average cost inventory method is an accounting technique used to calculate the cost of goods sold and ending inventory. The idea behind it is to assign a weighted average unit cost to the cost of a product ...
read moreInventoriesBy Yuriy Smirnov Ph.D.June 23, 2017Last-in, first-out or LIFO inventory method is applied to calculate the cost of goods sold (COGS) and the inventory account balance at the end of the accounting period. It assumes that inventories bought last should be sold first. In other words ...
read moreInventoriesBy Yuriy Smirnov Ph.D.June 19, 2017The first-in, first-out or FIFO inventory method is used to compute the cost of goods sold (COGS) and the inventory account balance at the end of the relevant period. The idea behind this method is that inventories bought first should be sold first ...
read moreNon-current AssetsBy Yuriy Smirnov Ph.D.June 17, 2017If the revaluation model is used by an entity as an accounting policy, assets are carried at their fair value. In other words, the carrying amount of an asset can be adjusted both upward and downward if there is an indication that it differs materially ...
read moreNon-current AssetsBy Yuriy Smirnov Ph.D.June 15, 2017The cost model is used as an accounting policy to report carrying an amount of property, plant, and equipment (fixed assets) in the balance sheet. It requires an asset to be carried at its initial cost (also referred to as historical cost) less any ...
read moreNon-current AssetsBy Yuriy Smirnov Ph.D.April 19, 2017Asset impairment occurs when the carrying amount of an asset exceeds its recoverable amount. The impairment test is required when there are some indications or reasonable assumption that the recoverable amount of an asset declines rapidly ...
read moreNon-current AssetsBy Yuriy Smirnov Ph.D.April 17, 2017Accounting for asset disposal (also known as derecognition) removes the cost or fair value of a specific asset, related accumulated depreciation, and accumulated impairment losses from the balance sheet. Asset disposal can happen either at the end of the useful life of an asset when ...
read moreNon-current AssetsBy Yuriy Smirnov Ph.D.April 16, 2017Property, plant, and equipment are tangible assets that are used for economic benefit during more than one period. Common examples include office buildings, land, machinery, office furniture, and computers ...
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