International Accounting Free Essay Example, 1000 words

Selling and general administrative costs are not included in valuing inventory. Tesla Motors uses the standard cost method to value inventories while Coda Automotive uses the retail method to value its inventory. There are key differences on the methods used in inventory costing. In Tesla Motors, the last in first out method (LIFO) is used to establish the total cost of inventory for the period. In Coda Automotive, inventories are priced at net realizable cost. Pricing inventories at their net realizable costs under the IFRS indicate that inventories can be written-down. This is not the case for the U. S GAAP standard; inventories cannot be written-down under any circumstances. Both companies depreciate their fixed assets. The U. S GAAP and the IFRS recognize the importance of presenting truthful information to the auditors. It would not be realistic for one standard to value long-term assets at their original value. Long-terms assets are depreciated over their entire life span to indicate their true value at the period of financial reporting. Under this category, some variation is noted on how property plant and equipment (PPE) is valued. We will write a custom essay sample on International Accounting or any topic specifically for you Only $17.96 $11.86/page