Asc 330-10

Furthermore, according to the 2016 Annual Report, Woolworths’ cost of inventories is determined on a weighted average basis. The weighted average method is perceived to assume that items are of similar nature (Carlon et al. 2016). This method would lead to identical goods being allocated to the same price using the weighted average unit cost, which can then be applied to calculate the cost of ending inventory (Carlon et al. 2016). For this particular case, Woolworths Limited, as a commercial entity, regards the cost of inventory to be difficult to measure due to the high turnover rates and accessibility costs of different products.

Note: Due to the issuance of certain new accounting literature, changes in the status of ongoing projects during the past year, or evolution of practice, the following updates to the existing cases should be noted.

inventory using the cost method and did not change the method used during the current

The FASB ASC 330 Inventory provides primary authoritative guidance for the accounting for inventory. The predecessor literature is Accounting Research Bulletins (ARB) No.43 Chapter 4, paragraph 4 (Issued June, 1953) and Statement of Financial Accounting Standard (FAS) NO.151 Inventory cost- an amendment of ARB No.43, Chapter 4 (Issued November, 2004).

In 1973 the Financial Accounting Standards Board (FASB) was established to set the financial accounting standards in the United States of America for nongovernmental entities. These standards are collectively called U.S. Generally accepted Accounting Principles, or U.S. GAAP. The Securities and Exchange Commission (SEC) and the American Institute of Certified Public Accountants acknowledge the authority of these standards (FASB, n.d). A “proven, independent due process” is used to collect the viewpoints of the financial statements prepares and users for the constant improvement of these standards. An Accounting Status Update(ASU) is not an authoritative source however documents the amendments to communicate the changes in the FASB Codification for a user to understand the reason and future of those changes (FASB, n.d).

According to Section 360-10-15-4, the scope of the standard applies to transactions and activities related to recognized long-lived assets of an entity to be held and used, including capital leases of lessees, long-lived assets of lessors subject to operating leases, proved oil and gas properties that are being accounted for using the successful-efforts method of accounting, and long-term prepaid assets.

2.2 Inventories (AASB 1019) as a general principle, inventories are valued at the lower of cost (including fixed and variable factory overheads where applicable) and net realizable value. Cost is determined on the basis of first-in-first-out, average or standard, whichever is the most appropriate in each case.

As the business environment grows and companies find new ways to expand into their respective - or even new – markets, it is important that reporting standards stay up to date with changes and continue to assist companies in providing their users with useful accounting information. Information is labelled as being useful when it meets the

FASB (1981).Statement of Financial Accounting Standards No. 51. Retrieved on November 7, 2011 from: http://www.fasb.org/pdf/fas51.pdf

According to Investopedia, “Full costing is an accounting method used to determine the complete end-to-end cost of producing products or services.” Full costing is also called "full costs" or "absorption costing."

b. The inventory write down recorded, as an expense by the company is $4.4 million. It is measured at lower of cost and net realizable value. Cost is measured by weighted average using standard cost method or

The Codification’s goal is to clarify the company of thousands of U.S. authoritative accounting announcements published by diverse standard-setters. Therefore, to accomplish this objective, the FASB sponsored a project to incorporate and typically adapt all related accounting publication announced by the standard-setters of the U.S. in conjunction with those of the FASB, the Emerging Issues Task Force (EITF) and the American Institute of Certified Public Accountants

Businesses – from manufacturing, merchandising and service industries alike – take careful considerations for their costing systems. Setting-up competitive prices in the market can be a result of proper costing methods. Misallocation of costs may lead to incorrect price estimates, continuous production of unprofitable products, and ineffective processing schedules. In this case study, we will discuss the costing methods Zauner Ornaments are currently using and upon conclusion, it will enable us to distinguish the advantages and disadvantages of each costing method.

goods. They can also be in process between different locations. Holding of inventories can cost a