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New BNA Portfolio Examines The Financial Reporting of Inventories

NEWS RELEASE

Contacts:
Mark Carrington
(703) 341-5880

Arlington, Va. (July 7, 2008) –BNA®, publisher of the authoritative and universally recognized Tax Management Portfolios, has released the latest addition to the Accounting Policy and Practice Series, the BNA Tax and Accounting Portfolio 5168, The Financial Reporting of Inventories.

This new Portfolio reviews the most common methods of reporting inventories, the financial statement implications of changing inventory methods, and the rules for disclosing inventory methods and practices in financial statements.

The selection of an inventory method has a direct affect on the financial reporting of a company. Because it is rarely possible for a company to accurately trace individual items purchased for inventory then sold to customers, the company must create an assumption about the flow of goods into the company. Then, when it sells the goods, it must create an assumption about the allocation of inventory costs between cost of goods sold and ending inventory. The most common cost flow assumptions are first-in, first-out (FIFO), last-in, last-out (LIFO), and average cost profitability. Measures of profitability will rise or fall depending on the inventory method selected. This Portfolio explains the rules and common practices used in selecting and implementing these methods and explain the existing accounting rules regarding inventory. It also identifies areas in which rules do not exist and industry practice is used.

This Portfolio may be cited as BNA Tax and Accounting Portfolio 5168, Benke, The Financial Reporting of Inventories.

Ralph L. Benke, Jr., an award-winning Professor Emeritus of the School of Accounting at James Madison University, is Founder and Editor of the Journal of Accounting Education and Founding Director of the Center for Accounting Research. Benke’s articles have appeared in many accounting and accounting-related publications both domestically and abroad. He has earned degrees from Florida State University; (CMA, Ph.D.), University of Washington, (M.B.A.) and Washington State University (B.S.).

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BNA is the foremost publisher of print and electronic news, analysis, and reference products, including the recently launched Accounting Policy & Practice Series.  BNA publications intensely cover legal and regulatory developments for professionals in business and government. BNA is the oldest wholly employee-owned company in the United States, and produces more than 350 news and information services — including Daily Labor Report and Daily Tax Report — widely respected for comprehensive and objective reporting and analysis.