Valuation of Inventory: Taking Stock of the Guidance

BVResearch Pro
Training Event Transcripts
August 20, 2020
Anthony J. Pumphrey, ASA, CFA
fair value for financial reporting
business combinations, intellectual property, ASC 820, fair value measurements, weighted average cost of capital (WACC), valuation methodology, internal revenue service (IRS), financial accounting standards board (FASB), inventory, american institute of certified public accountants (AICPA), first in, first out (FIFO), last in, first out (LIFO), weighted average return on assets (WARA)


Given divergences in both practice and guidance, inventory valuation can seem challenging. In this webinar, Anthony Pumphrey will illustrate simple, straightforward modifications to the valuation of inventory that you can incorporate into your valuation process. Review what comprises the book value of inventory and valuation guidance from the FASB, the IRS, and the AICPA. Next, walk through an example valuation of raw materials, work-in-progress, and finished goods in accordance with this guidance. The example provided will reconcile the top-down (comparative sales) and bottom-up (cost of reproduction) methods. Finally, see an illustrated how-to account for product- and process-specific profit and expenses, reconcile to market participant data, and adjust supporting assets so as to not double count profit.
Valuation of Inventory: Taking Stock of the Guidance
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