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

This topic has 1 reply, 1 voice, and was last updated Mar-20 by Matt_AnalystPrep.

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- Matt_AnalystPrep
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  09 Mar 2020 at 7:07 am
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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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  13 Mar 2020 at 8:01 am
  
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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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