Response To Client Request I

Response to Client Request I
From: Ron Spellman
To: Supervisor
RE:

It is my understanding that you argon not clear about the information I am asking for in order to complete your financial statement. To separate serve you I am writing this paper to explain the purpose of adjusting lower follow of commercialise place gillyflower valuation, capitalizing take on building construction, recording gain or red on plus disposal, adjusting goodwill for impairment.
Adjusting lower exist of market inventory on valuation
As the hail of ending inventory is valuated, Generally Accepted Accounting Principles (GAAP) requires that comparison be do with the current market value. As give tongue to in Chapter 4,
document Pricing, of ARB No. 43 specifies that inventory should be stated at cost or market, whichever is lower (Financial Accounting Standards advance [FASB], n.d.). The term market refers to the stand-in cost but particular(a) to upper (ceiling) and lower ( story) limits in order to apply fill-in cost as market value. The market or switch cost lavatorynot be more than the ceiling neither can it be lower than the floor amount. The lower cost of market rule consists of four relevant amounts, which are cost, rehabilitation cost, authorize realizable value, and net realizable value reduced by the normal profit.



Net realizable value (NRV) consists of the selling wrong minus the estimated costs to complete and sell the product, which is referred to as ceiling. The floor amount consists of the NRV minus the normal profit.
If the current replacement cost is more than the ceiling amount than the current replacement cost would be used as the market amount. If the current replacement cost is less than the floor amount than the floor would be used as the market amount. If the current replacement cost is between the ceiling and the floor amount than the current replacement is the market cost (Schroeder, Clark, & Cathey, 2005).
Capitalizing interest on building construction
When an asset such as a...If you want to get a honorable essay, order it on our website: Orderessay



If you want to get a full essay, wisit our page: write my essay .