inventory in temporal method

CFA Level II
#1

for the evenly bought and sold inventory we will use weighted average cost of inventory But am i correct in saying tht for FIFO we would use historical rate for COGS and current for inventory? And opposite for LIFO? Thanks

#2

Im sure about the historical rate for COGS for FIFO and weighted average cost for evenly bought and sold; however I’m not sure about LIFO… We’d appreciate anyone’s help… Thanks for the question sumz

#3

thx bilal. anyone else?

#4

never saw current for inventory under temporal.

#5

Inventory, non-monetary asset, would be remeasured at the historical rate under all scenarios regardless of inventory accounting correct?

#6

Thats my understanding Chuckrox8 but wording may indicate that the correct historical rate is the avg rate.

#7

stingreye Wrote: ------------------------------------------------------- > Thats my understanding Chuckrox8 but wording may > indicate that the correct historical rate is the > avg rate. Very true. I remember screwing up a vignette because I didn’t read to use the Avg rate. The average rate makes much more since for Inv and COGS in my opinion. Nothing surprises me about IFRS anymore, it’s all backwards.

#8

I would use the same exchange rate for COGS and inventory: historical rate for temporal, average rate for current. Same logic applies to depreciation and PPE.

#9

madamesoleil Wrote: ------------------------------------------------------- > I would use the same exchange rate for COGS and > inventory: historical rate for temporal, average > rate for current. Same logic applies to > depreciation and PPE. Not quite …All B/S items under current use current rate, except common stock.

#10

Temporal: COGS/Inventory - historical Current: COGS - Average Inventory - Current

#11

Plzzz confirm it.

#12

under temproal, inventory is at historical cost, as stated before. If inventory is kept track at a weighted average value, then the historical cost becomes a weighted average value, and thus you are effectively using the avg rates instead of historical rate, althoguh techincally you are still using the historicla rate. Im pretty sure thats correct.