A PDF version of this publication is attached here: Inventory guide (PDF 700kb)
PwC is pleased to offer our updated Inventory guide. This guide summarizes the applicable accounting literature, including relevant references to and excerpts from the FASB’s Accounting Standards Codification (the Codification). It also provides our insights and perspectives, interpretative and application guidance, illustrative examples, and discussion on emerging practice issues. The PwC guides should be read in conjunction with the applicable authoritative accounting literature. Guidance on financial statement presentation and disclosure related to inventory can be found in PwC’s Financial statement presentation guide (FSP 8.4).
References to US GAAP
Definitions, full paragraphs, and excerpts from the Financial Accounting Standards Board’s Accounting Standards Codification are clearly designated, either within quotes in the regular text or enclosed within a shaded box. In some instances, guidance was cited with minor editorial modification to flow in the context of the PwC Guide. The remaining text is PwC’s original content.
References to other chapters and sections in this guide
When relevant, the discussion includes general and specific references to other chapters of the guide that provide additional information. References to another chapter or particular section within a chapter are indicated by the abbreviation “IV” followed by the specific section number (e.g., IV 2.2.3 refers to section 2.2.3 in chapter 2 of this guide).
References to other PwC guidance
This guide focuses on the accounting and financial reporting considerations for inventory. It supplements information provided by the authoritative accounting literature and other PwC guidance. This guide provides general and specific references to chapters in other PwC guides to assist users in finding other relevant information. References to other guides are indicated by the applicable guide abbreviation followed by the specific section number. The other PwC guides referred to in this guide, including their abbreviations, are:
  • Derivatives and hedging (DH)
  • Financial statement presentation (FSP)
  • Foreign currency (FX)
  • Property, plant, equipment and other assets (PPE)
  • Revenue from contracts with customers (RR)

Summary of significant changes
Following is a summary of the noteworthy revisions to the guide since it was last updated. Additional updates may be made to future versions to keep pace with significant developments.
Revisions made in May 2024
Chapter 1, Inventory costing
  • IV 1.6 was added to include discussion and an example of accounting considerations for tolling and manufacturing services arrangements.

Chapter 3, LIFO inventories
  • IV 3.6.2 was added to address LIFO liquidations triggered by a disposal of a business or group of assets.

This publication has been prepared for general informational purposes, and does not constitute professional advice on facts and circumstances specific to any person or entity. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication. The information contained in this publication was not intended or written to be used, and cannot be used, for purposes of avoiding penalties or sanctions imposed by any government or other regulatory body. PricewaterhouseCoopers LLP, its members, employees, and agents shall not be responsible for any loss sustained by any person or entity that relies on the information contained in this publication. Certain aspects of this publication may be superseded as new guidance or interpretations emerge. Financial statement preparers and other users of this publication are therefore cautioned to stay abreast of and carefully evaluate subsequent authoritative and interpretative guidance.
The FASB material is copyrighted by the Financial Accounting Foundation, 401 Merritt 7, Norwalk, CT 06856, and is reproduced with permission.
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