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

Tax reform changes are now in effect

With all the recent tax law changes, this year it’s more important than ever to make sure your clients’ tax situations are squared away before year end. This report provides necessary guidance to ensure 2019 starts without a hitch.

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.