Accounting


FASB issued Statement no. 151 , Inventory Costs ( www.fasb.org/st/index.shtml ), an amendment of Accounting Research Bulletin (ARB) no. 43, chapter 4. The statement clarifies that abnormal amounts of idle facility expense, freight and/or handling costs and wasted materials (that is, spoilage) should be recognized as current-period charges, and it requires the allocation of fixed production overheads to inventory based on the normal capacity of the production facilities. The guidance is effective for inventory costs incurred during fiscal years beginning after June 15, 2005, but earlier application is permitted for costs incurred during fiscal years beginning after November 23, 2004. The statement’s provisions should be applied prospectively.

SPONSORED REPORT

States look to unclaimed property for revenue

This free report outlines the escheat process, common types of AUP, how different states are handling it and how companies can plan for potential audits and liabilities.

PODCAST

Using drones to enhance audits

Hermann Sidhu, CPA, global assurance digital leader at EY, walks us through EY’s exciting new project to use drones to help audit large warehouses and outdoor inventories.