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Unformatted text preview: having a similar nature and use to the entity • Inventory write-downs and recoveries in value o IFRS: inventory write-downs can be reversed for subsequent recoveries in value and are recognized in income o US GAAP: inventory write-downs are not reversed • Expensing write-downs o IFRS: expense account is not specified and a valuation allowance is used because future reversals are permitted Debit expense account and credit valuation allowance when recognize write-down Debit valuation allowance and credit expense account when reverse write-down) o US GAAP: write-down should be included in cost of goods sold (COGS) except when the amount is “substantial and unusual”, in which case it is reported as a loss on the income statement • Intangible assets produced for resale o IFRS: included in inventory o US GAAP: not included in inventory • Holding costs o IFRS: usually expensed o US GAAP: no guidance...
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This note was uploaded on 10/03/2010 for the course ACCOUNTING Finance 23 taught by Professor Bob during the Spring '10 term at Wayne State University.
- Spring '10
- Managerial Accounting