ACCT 110 Lecture Notes - Lecture 15: Santa Barbara City College, Gross Profit, Financial Statement
Document Summary
Inventories measured at net realizable value because that is the amount that will be collected in cash. For inventory to be recorded above cost and for revenue to be recognized before a sale: The sale is assured or there is an active market and low risk of not selling. Other situations where nrv can be used. Industry standard: agricultural produce, forest products, mineral products. Cost figures are too difficult to obtain. By-products where cost = selling price less cost to bring to market. Inventories measured at fair value less costs to sell. Changes in the fair value less costs to sell are recognized in net income in the period of change. Biological assets and agricultural produce at point of harvest. Agricultural produce at point of, or after, harvest: products of the biological assets. Unrealized gains/losses included in the operations of related year.
