Simplifying the subsequent measurement of inventory — FASB discusses comment-letter feedback
At its meeting today, the FASB discussed comments it received on its proposed Accounting Standards Update, Simplifying the Measurement of Inventory. The discussion focused on entities’ challenges in applying the proposal’s lower-of-cost-and-net-realizable-value measurement concept related to their use of (1) the last-in, first-out (LIFO) inventory measurement method with a lower-of-cost-or-market reserve and (2) the retail inventory method (RIM). (See the meeting handout for more information.)
The FASB decided to retain the project’s current scope (i.e., focus on the measurement of inventory impairment) and instructed its staff to perform additional research and analysis on how the concepts in the proposal can be applied by entities using the LIFO and RIM inventory methods.
