Financial Reporting
Demystifying the Treatment of Inventory
FIFO, LIFO, Weighted Average, and Perpetual Versus Periodic Systems
1 CPD credit on completion
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Certificate on completion
Downloadable resources
Self-paced learning
About This Course
Course Information
The learning outcomes from this CPD technical update course include: Appreciating the cost of inventory Understanding the impact on gross profit Using different inventory systems
Certificate on Completion
This course is made up of videos, questions and additional reading materials, and accounts for 1 unit of CPD. One unit is the equivalent of one hour of learning.
Course Sections
This course is made up of the following sections:
- Understanding inventory (video)
- Understanding inventory (quiz)
- Using different inventory systems (video)
- Using different inventory systems (quiz)
What You Will Learn
- Compare FIFO, LIFO, weighted average cost, and specific identification methods for inventory valuation
- Explain why LIFO is permitted under US GAAP but prohibited under IFRS
- Calculate the impact of changing inventory methods on cost of goods sold, gross profit, and financial ratios like debt-to-equity
- Distinguish between perpetual and periodic inventory systems, including cost and accuracy trade-offs
- Identify which costs should be included in the cost of inventory under IAS 2, including fixed production overhead and storage costs during production
Who This Course Is For
- Accountants who deal with inventory valuation and costing in practice
- Finance professionals who need to understand how inventory methods affect reported profit and ratios
- Professionals preparing for exams that cover IAS 2 or inventory accounting under IFRS and US GAAP
Prerequisites
- Basic understanding of the income statement and cost of goods sold
- No specialist inventory accounting experience is required
Frequently Asked Questions
Course Details
CPD Credits1
CertificateYes
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CPD certificate on completion
Downloadable resources
Self-paced learning
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