CFA CFA Level 1 CFA Level 1 Question of the Week – Financial Reporting and Analysis

CFA Level 1 Question of the Week – Financial Reporting and Analysis

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    • Matt_AnalystPrep
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      Core Corp. reports under IFRS and its inventory was written down to $6,500. However, due to a shortage in supply, the Net Realizable Value (NRV) of inventory recently increased to $8,000. Which of the following is most likely the value of the write-up of inventory?

      • A. $1,500
      • B. $0
      • C. Cannot be ascertained
    • Matt_AnalystPrep
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      The correct answer is A.

      Under IFRS, the inventory can be written up later if the value of inventory is recovered. Since the NRV of inventory increased from $6,500 to $8,000, there will be a write-up of inventory by $1,500.

      Note: Under U.S. GAAP, no write-up is allowed.

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