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Case Study

ALL THAT GLITTERS IS GOLD: A CASE OF INVENTORY ACCOUNTING POLICY

Srinivasan Padmini
Inventory (1143), First in First out (FIFO) (9189), Accounting (1059), Weighted Average Method (31355) , Accounting Policy , Gold

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Abstract  

The case provides a setting in which students can understand the relationship between inventory valuation, cost of goods sold and the gross margin. The inventory accounting policy choice that a company makes would have a direct impact on the company’s profitability and its balance sheet. Changes in accounting policy will impact the current performance as well as the future performance. The company in this case changed its valuation of gold from weighted average method to first-in first-out (FIFO) method. Additionally, the case also analyses the relation between hedge accounting and inventory.

Learning Objective 

 To expose the students to various methods of inventory accounting and to understand the impact of  changes in the accounting policy

  • Pub Date:
    30 Mar 2017
  • Source:
    IIM-B
  • Discipline:
    Accounting / Banking & Financial Services
  • Product#:
    1314
  • Keywords:
    Inventory (1143), First in First out (FIFO) (9189), Accounting (1059), Weighted Average Method (31355) , Accounting Policy , Gold
  • Length:
    Pdf : 12 page(s) ,

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