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Determining the Value of Inventory under IFRS and US GAAP

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The Golden Corporation has collected the following information for its main product:

Cost 18.00
Replacement cost 17.00
Estimated cost to sell 5.00
Selling price 30.00

A profit margin of 25 percent is considered normal for the product. In determining the value of its ending inventory, what unit value should Golden Corporation use under IFRS and US GAAP?

A. IFRS 25 US GAAP 18
B. IFRS 25 GAAP 17.50
C. IFRS 18 GAAP 18
D. IFRS 18 GAAP 17.50

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Solution Summary

this solution shows how to determine the unit value an organization should use under IFRS and US GAAP based on its profit margins.

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D. IFRS 18 GAAP 17.50

Under US GAAP, we calculate the market as the replacement cost with ceiling and ...

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