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

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.

A CFA Level 1 Discussion About CFA Level 1 Question Of The Week - Financial Reporting And Analysis (inventory)

Add A Reply

This topic has 1 reply, 1 voice, and was last updated Mar-208:01 am by Matt_AnalystPrep.

Author

Posts
- Matt_AnalystPrep
  Participant
  - CFA Charterholder
  09 Mar 2020 at 7:07 am
  Up
  12
  ::
  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
  Participant
  - CFA Charterholder
  13 Mar 2020 at 8:01 am
  Up
  3
  ::
  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.
Author

Posts

Viewing 1 reply thread

You must be logged in to reply to this topic.