Inventory and IFRS

Question 1

What are the major differences between IFRS and GAAP in accounting for Inventory?

Answer 1

• IFRS uses LCNRV while GAAP uses LCM
• IFRS requires same cost formulas for similar inventory while GAAP doesn’t require this
• IFRS allows reversal of write down to NRV while GAAP prohibits this
• IFRS prohibits LIFO
• IFRS cost flow assumption mirrors physical flow unlike GAAP