CATEGORY TYPE: Finance & Accounting

COURSE NAME:Advanced Inventory Accounting and Costing


 30-06-2019  04-07-2019  Dammam/Saudi Arabia Register

Whether you are a merchandiser, manufacturer, contractor or a service provider, inventory has a major impact on your net income and on the balance sheet. In this course, participants are guided step by step through best practices for the purchasing process, the allocation of direct costs, indirect costs and production costs and comparisons between the different cost flow assumptions such as FIFO, LIFO and weighted average cost along with their impact on the financials and the physical counting of goods. We will discuss the importance of having accurate inventory figures reflecting their net realizable value, use Excel and pivot tables to analyze inventory balances, calculate values of obsolete inventory and simulate calculations of weighted average cost.


By the end of the course, participants will be able to:

  • List different types and reasons to hold inventory and construct the overall inventory cycle from purchase to sales
  • Justify difference between perpetual and periodic inventory methods and evaluate inventory cost allocation techniques
  • Recognize and correctly measure inventory under International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP)
  • Account properly for write downs, write backs and impact of change in inventory accounting policies on financial statements
  • Apply professional judgment in accounting for inventory not on hand
  • Categorize different inventory cost-flow assumptions and how they affect the company’s financial position and income statement
  • Outline the various approaches for cost accounting
  • Employ Excel and pivot table tools and techniques to analyze inventory and calculate weighted average costs

Introduction to inventory

  • Current assets and inventory management
  • The four reasons for keeping inventory
  • Inventory cycle from purchases to sales:
    • Ordering and receiving
    • Sales and delivery
    • Best practices in count process
    • Inventory industry types: merchandise, manufacturing, construction and real estate
    • Differences between inventory, fixed assets and investment properties
    • Understanding and analyzing inventory ratios


Accounting for inventory

  • Perpetual versus periodic inventory methods
  • Cost accounting versus financial accounting
    • Cost allocation techniques:
      • Direct material, direct labor and manufacturing overhead
  • Initial recognition
    • Cost of purchase, cost of conversion and treatment of discounts and rebates received
    • Measurement after recognition
      • Calculating 'net realizable value' (IFRS)
      • Calculating market price under the Lower of Cost or Market (LCM) method (GAAP)
      • Estimating and booking write downs for slow moving and obsolete inventory
      • Accounting for write backs of impairment under IFRS and GAAP
      • Accounting for errors identified on physical count


Accounting for inventory : special topics

  • Accounting for inventory not on hand
  • On consignment
  • Goods in-transit: defining incoterms
  • Sold with right of return
  • Sold subject to installation and inspection
  • Sold on a 'bill and hold' basis
  • The concept of 'inventory credit': inventory used as collateral to raise finance
  • Impact of accounting policies changes on financial statements
  • Inventory required disclosures


Inventory cost flow assumptions

  • First-in First-out (FIFO) and Last-in First-out (LIFO)
  • Weighted average and moving average
  • Specific identification


Inventory estimation and cost accounting approaches

  • Inventory estimation techniques
    • Gross profit method
    • Retail method
    • Cost accounting approaches
      • Traditional costing versus activity based costing
      • Target costing versus cost plus pricing method
      • Standard cost accounting
      • Throughput accounting

Inventory professionals, including supervisors, account managers, purchasing and facility supervisors and coordinators, financial controllers, new employees handling inventory, internal auditors, warehouse assistants and managers, and operations managers.

    • 5 Day(s)

    The presentation is generally appealing to me. The dedication & devotion of the instructor are both laudable & admirable.
    Mohammed F. Alotaibi

    Really this course is important for any inspector, so I will recommended it for our employees. And thanks a lot!
    Ahmed Al-Yami

    You are doing excellent bringing such very talented instructor. Please keep it up.
    Ahmed Afifi
    Al-Zamil CoolCare

    I would like to appreciate you as well as the instructor for a good training due to the fact that the helping to gain new information about the types of valve with advantages and disadvantage as well. Many thinking.
    Zaki Ali Aldawood

    This course was very beneficial and helpful to understand one of the Major NDT method. I encourage ITC to continue with this performance.
    Talal Saad AlHasawi

    ITC service was in overall excellent. Thanks.
    Wael M. Morsy

    This course was good and a nice guide to the PMP exam. Thanks.
    Yazeed Mohamed Mreki
    General Authority of Civil Aviation (GACA)

    It was good course & good preparation with excellent instructor. Thanks a lot.
    Faisal Mahdi Al-Qahtani

    It was a nice course to have. I suggest taking this course with the same instructor to other people. Thanks for the instructor for his kindness & helfull during the course.
    Abdul-Moniem Al-Humoud

    It is very important course, which enable us to improve our knowledge to work approaching our big account and can be recall us the key account. This is will support us to active result for the best of the Co.
    Mohammed Amjad
    Al-Suwadi Services

    The instructor is highly and technical knowledgeable in explaining all the subject in the course taken.
    Noel V. Garan
    Coldstorec Group Of Saudi Arabia

    Instructor was well prepared and knowledgeable I gain lot of useful information.
    Gulam Khan
    Saudi Aramco

    It was a good learning experience. Got to know the concept involved in key account.
    Muthuraman Nachiappan
    Al-Suwadi Services

    The instructor Mr. Ahmed Sabry has a very nice spirit.
    Salam Fakhoury
    Al Khodari Company

    It is very useful to us and increase our knowledge.
    Mohammed Rashed Afifi
    Al Khodari Company

    The course is excellent and helpful. It help me in organizing the work in more safe manner.
    Muzammil Hayat
    Al Khodari Company

    The instructor is very knowledge and hard working, his way of teaching is very good.
    Ibrahim Darwish
    Al Khodari Company