Teaching Case: An Inventory Valuation Dilemma for Financial Statement Reporting
DOI:
https://doi.org/10.33423/jaf.v24i4.7250Keywords:
accounting, finance, financial reporting, auditing, inventory valuations, business ethicsAbstract
Using Accounting Standards Update (ASU) 2015-11: Inventory (Topic 330), Simplifying the Measurement of Inventory from the Financial Accounting Standards Board (FASB), and Auditing Standards (AS) 2801: Subsequent Events from the Public Company Accounting Oversight Board (PCAOB), this case study creates critical thinking and ethical decision-making. The assignment requires students to consider inventory valuation given a hypothetical scenario under a triggering event. The case integrates fictitious actors and other components that can be tailored for teaching adaptation. It requires students to assume the role of the participants, while considering how management and auditors could arrive at different standard interpretation.
References
Bergquist, S., Otten, T., & Sarich, N. (2020). COVID-19 pandemic in the United States. Health Policy and Technology, 9(4), 623–638.
FASB. (2024). Financial Accounting Standards Board. Financial Accounting Standards. UPDATE 2015-11—INVENTORY (TOPIC 330). Retrieved from https://fasb.org/page/document?pdf=ASU+2015-11.pdf&title=UPDATE%202015-11%E2%80%94INVENTORY%20(TOPIC%20330)
Levy, H.B. (2018). ‘Net realizable value’ is the new ‘market’: The effect of ASU 2015-11 and other inventory valuation issues. CPA Journal, 88(6), 64–65.
PCAOB. (2024). Public Company Accounting Oversight Board. AS 2801: Subsequent Events. Retrieved from https://pcaobus.org/oversight/standards/auditing-standards/details/AS2801
