Inventory valuation

Pros and Cons of Inventory Valuation In the standard-price method of inventoiy valuation, all materials are taken out at the same... 

In both the average-cost and the standard-cost methods of valuing inventory, materials are not charged out at actual cost. Thus, the amount of profit or loss for the period may be varied by the method chosen to value the inventoiy. For this reason, accountants usually insist that the method of inventory valuation be consistent from period to period. This causes inertia but does not prevent a change of method men it can be justified. In such cases, it is usual to inform stockholders of the change because the influence on declared profits can be large. 

Fisher M, Ramdas K, Zheng Y (2001) Ending Inventory Valuation in Multiperiod Production Scheduling. Management Science 45 679-692... 

Unfortunately, there is no right or wrong way to value inventory, although certain methods are not allowed in certain countries for tax-assessment purposes. For example, LIFO is not allowed in the United Kingdom. As a general rule, the method used should be the one that gives the lowest tax liability. However, it is generally accepted that consistency is also a virtue in inventory valuation. 

Allocation of all direct and indirect costs (highlighting environmental, safety and health costs) to a product or product line for the purposes of inventory valuation, profitability analysis and pricing decisions... 

Profits with inventory valuation adjustment and without capital consumption adjustment. Sources Economic Reports of the President, 1977, Tables B-17 and B-19 1995, Table B-25. 

In Other Value Added (Table 4.4b) is property-type income, which is a composite of several factors, including proprietor s income, rental income of persons, corporate profits, inventory valuation adjustment, net interest, business transfer payments, surplus of government enterprises less subsidies, and capital consumption allowances (depreciation, depletion, and amortization). As expected, property-type income is highest for sector 7 IB, real estate. The depreciation part of property-type income accounts for the high values of some of the CPI sectors (e.g., 27 and 29). The depletion part of property-type income accounts for the moderately high values of sector 8, crude petroleum and natural gas. 

Amuse- ments Health services Educational and social services, and membership organizations Federal Govern- ment enter- prises State and local government enterprises General govern- ment industry House- hold industry Inventory valuation adjustment... 

Non- comparable imports Scrap, used and secondhand goods General govern- ment industry Rest-of-the-world adjustment to final uses House- hold industry Inventory valuation adjust- ment... 

Inventory management It involves processes that identify physical inventory monitoring, inventory valuation, visibility, report actual and projected inventory status, and other functions associated with tracking (Abbasi 2011). 

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