Course Description

A more in depth look into inventory costing methods (FIFO, LIFO, etc.) and how those methods impact reported financial results. Other issues such as LIFO liquidations and the lower of cost or market rule are presented with an emphasis on interpretation by financial analysts.

Broderick Associates

Chris Broderick

CHRIS BRODERICK, as the primary principal of Broderick Associates, Chris Broderick translates his experience as a financial analyst to the teaching of accounting and financial statement analysis. Chris is a second-generation instructor of this family-run enterprise beginning his teaching in 1995 in association with his father. Since 1986 as a analyst with Chase Manhattan Bank, Chris has a broad expertise in international credit analysis traveling throughout the globe from his base in the New York and London offices. Later in 1989 he began training within Chase on a worldwide platform. Since joining Broderick Associates, he has trained employees with HSBC, JP Morgan Chase, TD Bank among others; both locally and globally. Throughout his career, he has also been aligned with various colleges and universities.

Course curriculum

  • 1

    Introduction, Contents, Objectives and Prerequisite Knowledge

  • 2

    Section 1 : Review of Accounting Procedures

  • 3

    Section 2: Inventory Costing Methods

    • Inventory Costing Methods - Specific Costing

    • Average Costing

    • Exercise 1

    • Solution: Exercise 1

    • First - In, First - Out Inventory Costing Method

    • Last - In, First - Out Inventory Costing Method (Year 1)

    • LIFO Base and Layers

    • Last - In, First - Out Inventory Costing Method (Year 2)

    • Exercise 2

    • Solution: Exercise 2
  • 4

    Section 3: LIFO Liquidation

    • LIFO Liquidation

    • Example: LIFO Liquidation

    • Exercise 3

    • Solution: Exercise 3
  • 5

    Section 4: LIFO Accounting Issues

    • LIFO Conformity Rule

    • Tax Reduction Under LIFO

    • LIFO Reserve

    • Lower of Cost or Market Rule

    • Exercise 4

    • Solution: Exercise 4
  • 6

    Section 5: Analysis of Reported Information

    • Analysis of Costing Methods

    • Comparison of FIFO and LIFO to Current Costing

    • FIFO/LIFO and Realized Inventory Profits

    • LIFO Liquidation

    • Unrealized Holding Gains

    • Effect of Costing Methods on Inventory Ratios

    • Relative Advantages and Disadvantages of FIFO and LIFO
  • 7

    Problems and Solutions

    • Problem 1

    • Solution: Problem 1

    • Problem 2

    • Solution: Problem 2

    • Problem 3

    • Solution: Problem 3

    • Problem 4

    • Solution: Problem 4

    • Problem 5

    • Solution: Problem 5