Under the rules of the new AICPA pronouncement policy, which applies to all accounting and auditing pronouncements issued after July 1, 2015, ASU 2015-11 will not be testable in 2016. Instead, the new policy defers testing of this ASU until January of 2017.
The measurement of inventory will be simplified under ASU 2015-11 and will be more closely aligned with the measurement of inventory under IFRS. Under ASU 2015-11, measurement of inventory subsequent to initial recognition depends on the cost method used, as follows:
- Inventory accounted for using LIFO or the retail inventory method is measured at the lower of cost or market (LCM).
- Inventory accounted for using any other cost method (e.g., FIFO or average cost) is measured at the lower of cost or net realizable value (NRV).
The Gleim CPA Review test banks, online course, and digital versions of the books newly released for 2016 reflect this delay in testing, so you can be confident that you’re studying the correct material. You can also rest assured that, when the time comes for the new pronouncement to be tested, the Gleim materials will be updated with plenty of time for you to prepare.
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