Reading25. Inventories

25.1 Initial recognition of cost of inventory

25.1.1 生产成本（Product costs）and 期间成本（period costs）

Product costs(capitalized)	Period costs(expensed)
Purchase cost—discounts and rebates	Abnormal waste of materials, labor, or overhead
Conversion costs including labor and production overhead	Storage costs
Other costs necessary to bring the inventory to its present location and condition	Administrative overhead
	Selling costs

25.2 发出存货的计量

25.2.1 发出存货的计价方法（Inventory COGS valuation method）

一、个别计价法（Specific Identification）

The actual costs incurred to purchase the items specifically identified as sold

二、先进先出法（First-In, First-Out (FIFO)）

Oldest goods purchased (or manufactured) are sold first

三、后进先出法（Last-In, First-Out (LIFO)）

Newest goods purchased (or manufactured) are sold first

COGS reflect current costs

四、加权平均法（Weighted Average Cost）

Assigns the average cost of the goods available for sale

五、总结对比

	IFRS	U.S. GAAP
Specific identification	√	√
Weighted average cost	√	√
First-in, first-out (FIFO)	√	√
Last-in, first-out (LIFO)	×	√

• Assuming increasing prices

  	B/S
  	LIFO	FIFO
  Inventory
  Current Assets	Lower	Higher
  Quick ratio	No change	No change
  Current ratio	Lower	Higher
  Inventory turnover	Higher	Lower
  Total assets	Lower	Higher
  Total asset turnover	Higher	Lower
  Debt-to-assets	Higher	Lower
  Equity	Lower	Higher

  	I/S
  	LIFO	FIFO
  COGS	Higher	Lower
  Operating margin	Lower	Higher
  Tax	Lower	Higher
  Net Income	Lower	Higher
  Net profit margin	Lower	Higher
  ROA, ROE<1	Lower	Higher

25.2.2 存货盘点方法

一、实地盘存法（Periodic inventory system）

Inventory value and COGS are determined at the end of an accounting period.

Need a purchase account

二、永续盘存法（Perpetual inventory system）

Inventory value and COGS are updated continuously

Inventory purchased and sold is recorded directly in inventory when the transactions occur.

三、总结归纳

Perpetual inventory system= Periodic inventory system in FIFO and specific identification method

Perpetual inventory system≠ Periodic inventory system in LIFO and weighted average cost method

25.2.3 后进先出法的特殊问题

一、后进先出储备（LIFO Reserve）

$$\begin{gathered} Inventor{y}_{FIFO}=Inventor{y}_{LIFO}+LIFOReserve \\ COG{S}_{FIFO} \end{gathered}$$