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Fasb Codification

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Cal State Fullerton
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Running head: CODIFICATION 1 FASB Codification Student’s Name Institutional Affiliation Course Date CODIFICATION 2 FASB Codification QUESTION 1 (a). Definition of inventory and characteristics that exclude an item from being classified as inventory. An inventory means goods that are waiting to be sold (can be the commodities of a trading concern or already produced goods from a manufacturer), commodities that are still in the production process (work in process), and goods which are consumed either directly or in indirectly in the process of production. Inventories, as defined in the above sentence, excludes some long-term assets which depreciate, or products, which when put to use are also subject to depreciation. A depreciable asset no longer being used and listed as being sold, does not imply that it may exist or be defined as a part and parcel of the inventory. Supplies and raw materials procured for the manufacturing process may be consumed or used for the building of assets which are long-term or for other reasons that are related to manufacturing process, however the fact is that elements of an inventory represent a lesser part of the whole and may not be entirely absorbed in the course of production and does not need to be classified separately. (b). Define a market and its relation to inventory. The concept of lower of cost or market. The term market is defined as a distribution channel within a specific territory. ‘Market’ as part of the terms lower of c ...
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