Overview
Inventory has a big effect on your net profits and on the balance sheet, whether you are a broker, retailer, contractor or a service provider. Participants are directed step by step in this program by best practices in the buying process, the distribution of direct costs, indirect costs and production costs, and contrasts between the various assumptions of cost flows such as FIFO, LIFO and weighted average costs, along with their effect on the financial and physical counting of items. We will address the importance of representing the net realizable value of correct inventory statistics, using Excel and pivot tables to evaluate inventory balances, quantify obsolete inventory values and simulate weighted average cost estimates.
Course Target
By the end of the program, participants will be able to:
- List various kinds and reasons for keeping inventory and building the overall inventory cycle from purchasing to selling
- Justify discrepancies between permanent and periodic methods of inventory and assess inventory cost allocation techniques
- Recognize inventory under International Financial Reporting Standards (IFRS) and Widely Accepted Accounting Principles and calculate it correctly (GAAP)
- Explain the correct use of written downs, written backs and the effect on financial statements of adjustments in inventory accounting policies.
- Apply professional judgment in non-hand inventory accounting
- Categorize various assumptions of inventory cost flow and explain how they influence the financial situation and income statement of the company.
- Outline the common approaches to cost accounting
- Using software and techniques from Excel and pivot table to evaluate inventory and measure weighted average costs
Target Audience
Inventory professionals, including supervisors, account managers, supervisors and coordinators of purchasing and installations, financial controllers, inventory managing new workers, internal auditors, warehouse assistants and managers, and managers of operations.
Personal Impact
Organization Impact
Course Outline
Module One
- Existing assets and inventory administration
- The four reasons for retaining inventory
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The period of inventory from purchases to sales:
- Order and receive
- Sales and distribution
- Best Counting Method Practices
- Types of inventory industry: products, development, building and real estate
- Inventory, capital assets and investment property gaps
- Comprehension and study of stock ratios
Module Two
- Permanent versus periodic approaches for inventory
-
Accounting for expenses versus financial accounting
- Techniques of expense allocation:
- Direct material, direct labor and overhead manufacturing
- Initial appreciation
- Purchase rate, conversion cost and treatment of earned discounts and rebates
-
After Identification Calculation
- Net realizable worth' estimate (IFRS)
- Consumer price estimation under the Lower Cost or Market (LCM) approach (GAAP)
- Estimating and booking written downs for outdated and slow-moving inventory
- Accounting for impairment write-backs under IFRS and GAAP
- Accounting for errors identified in physical count
Module Three
- Inventory accounting which is not on hand
- On delivery
- In-transit goods: concept of Incoterms
- Sold by right of return
- Sold subject to deployment and inspection
- Sold on the basis of 'bill and keep'
- The idea of "inventory credit": stock used as collateral to increase finance
- The effect of changes to accounting practices on financial statements
- Required Inventory Disclosures
Module Four
- First-in First-out (FIFO) and First-out Last-in (FIFO) (LIFO)
- Average and Moving Average Weighted
- Unique identity
Module Five
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Methods for inventory estimation
- Gross method for benefit
- Process Retail
-
Approaches to cost accounting
- Traditional costing versus costing dependent upon operation
- Goal cost versus cost plus method of pricing
- ⁇ Standard accounting for costs
- Accounting for Throughput
-
Use Excel for effective inventory analysis
- Consolidating the data for inventory
- Data validation for accuracy
- Analysis of slow moving and outdated inventories
- Tests of weighted average and moving average cost recalculations
- Using pivot tables to evaluate and report on inventory problems effectively
