cost of ending inventory computed using FIFO = 4.3 M
NRV = 4.1 M
Current replacement cost = 3.8 M
If the co. is using IFRS , instead of US GAAP, its COGS (in M) is most likely:
B. 0.3 lower
C. 0.3 higher
ans is A.
According to me if co. uses US GAAP its COGS is reduced by 0.5 M (ie lower of Cost or MV, 4.3,3.8)
IFRS its COGS will be reduced by 0.3 M (ie 4.3-4.1)
can anyone explain how ans is A ?