Chapter 9 - Accounting for inventories. After completing this chapter you should be able to: Identify major classifications of inventory, distinguish between perpetual and periodic inventory systems, understand the items to include as inventory cost, describe and compare the cost flow assumptions used to account for inventories,. | CHAPTER 9 ACCOUNTING FOR INVENTORIES INTERMEDIATE ACCOUNTING Principles and Analysis 2nd Edition Warfield Weygandt Kieso Goods included in inventory Costs included in inventory Cost flow assumptions Inventory Classification and Systems Issues in Inventory Valuation LIFO Special Issues Lower-of-Cost-or-Market Presentation and Analysis Classification Inventory systems LIFO reserve LIFO liquidation Dollar-value LIFO Comparison of LIFO approaches Basis for selection Ceiling and floor How LCM works Application of LCM Evaluation of rule Presentation of inventories Analysis of inventories Accounting for Inventories Service Cost - Actuaries compute service cost as the present value of the new benefits earned by employees during the year. Future salary levels considered in calculation. Interest on Liability - Interest accrues each year on the PBO just as it does on any discounted debt. Actual Return on Plan Assets - Increase in pension funds from interest, dividends, and realized and unrealized changes in the fair market value of the plan assets. Amortization of Unrecognized Prior Service Cost - The cost of providing retroactive benefits is allocated to pension expense in the future, specifically to the remaining service-years of the affected employees. Gain or Loss - Volatility in pension expense can be caused by sudden and large changes in the market value of plan assets and by changes in the projected benefit obligation. Two items comprise the gain or loss: difference between the actual return and the expected return on plan assets and, amortization of the unrecognized net gain or loss from previous periods Identify major classifications of inventory. Distinguish between perpetual and periodic inventory systems. Understand the items to include as inventory cost. Describe and compare the cost flow assumptions used to account for inventories. Explain the significance and use of a LIFO reserve. Understand the effect of LIFO liquidations. Explain the dollar-value LIFO . | CHAPTER 9 ACCOUNTING FOR INVENTORIES INTERMEDIATE ACCOUNTING Principles and Analysis 2nd Edition Warfield Weygandt Kieso Goods included in inventory Costs included in inventory Cost flow assumptions Inventory Classification and Systems Issues in Inventory Valuation LIFO Special Issues Lower-of-Cost-or-Market Presentation and Analysis Classification Inventory systems LIFO reserve LIFO liquidation Dollar-value LIFO Comparison of LIFO approaches Basis for selection Ceiling and floor How LCM works Application of LCM Evaluation of rule Presentation of inventories Analysis of inventories Accounting for Inventories Service Cost - Actuaries compute service cost as the present value of the new benefits earned by employees during the year. Future salary levels considered in calculation. Interest on Liability - Interest accrues each year on the PBO just as it does on any discounted debt. Actual Return on Plan Assets - Increase in pension funds from interest, dividends, and realized and .
