Selling Back Inventory To Vendor Ordinary Course Of Business Ch. 11
FASB has issued new financial reporting guidance that is designed to reduce the complexity related to the subsequent measurement of inventory.Accounting Standards Update, Inventory (Topic 330), Simplifying the Measurement of Inventory applies to all inventory except that which is measured using last-in, first-out (LIFO) or the retail inventory method. Inventory measured using first-in, first-out (FIFO) or average cost is included in the new amendments.FASB received feedback saying the changes would decrease costs and increase comparability for inventory measured using FIFO or average cost, but could result in high transition costs for inventory measured using the LIFO or retail inventory method.Inventory within the scope of the new guidance should be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.
Receiver’s Inventory. Must be filed within 30 days CRC 3.1181 Receiver’s Attorney. Must obtain Court permission before employing counsel. CRC 3.1180 Receiver’s Certificates. Receiver borrows money to sustain operations of illiquid enterprise/property by selling “Receiver’s Certificates” (almost always to secured creditor). Business), followed by a host of unsecured claims that Congress has determined deserve a special high priority (again, see §507; see, also, §503), and finally general unsecured pre-petition obligations. By virtue of their last-in-line position, general unsecured creditors might be viewed as having the most to lose should a chapter 11 debtor’s.
Selling Back Inventory To Vendor Ordinary Course Of Business Ch. 11 Of 9
Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method.FASB amended some other guidance in Topic 330 to more clearly articulate the requirements for the measurement and disclosure of inventory, but the board does not intend changes in practice to result from those changes.The amendments will take effect for public business entities for fiscal years beginning after Dec. 15, 2016, including interim periods within those fiscal years. For all other entities, the amendments take effect for fiscal years beginning after Dec. 15, 2016, and interim periods within fiscal years beginning after Dec. The new guidance should be applied prospectively, and earlier application is permitted as of the beginning of an interim or annual reporting period.Before issuance of the amendments, Topic 330 has required inventory to be measured at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin.The new guidance is a product of FASB’s simplification initiative, which is designed to reduce cost and complexity while maintaining or improving the information provided to financial statement users.— Ken Tysiac ( ) is a JofA editorial director.