Tax Accounting for Inventories

There are multiple ways to derive an inventory valuation, but which method will affect the amount of taxable income recognized?

This self-study course details the methods of valuing inventory, including special rules for dealing with FIFO and LIFO. Effect of shrinkage and market will also be discussed. You will learn about proposals to prohibit LCM and subnormal goods methods that include wash-sale goods.

This course also offers practical guidance on which costs are included or excluded from the UNICAP calculation and identifies which companies are subject to the UNICAP rules.

Learning Objectives

Learning Objective: 

When you complete this course you will be able to:

  • Identify the allowable inventory valuation methods for tax purposes.
  • Examine scenarios in which a taxpayer may wish to use FIFO or LIFO inventory methods.
  • Recognize when a taxpayer can qualify to use the simplified dollar-value LIFO method.
  • Determine which costs are included or excluded from the UNICAP calculation.
  • Identify which companies are subject to the UNICAP rules.
  • Recognize the simplified production method.
  • Identify when an estimated shrinkage deduction can be claimed.
  • Identify when a corporation is allowed to reduce the inventory value of goods.

Topics Discussed

Topics Discussed: 
  • Inventory methods
  • Financial statement conformity
  • Switching inventory methods
  • IRC Section 263A, Uniform Capitalization Rules (UNICAP)
  • Direct costs, indirect costs, burden rates
  • Estimating inventory shrinkage

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COURSE CODE

TSE.TAI

FIELD OF STUDY

Taxes

CPE CREDIT HOURS

2

KNOWLEDGE LEVEL

Intermediate

INTENDED AUDIENCE

CPAs in public accounting

PREREQUISITE

Experience in corporate taxation

ADVANCED PREPARATION

None

DELIVERY METHOD

Self-Study On-Demand

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(U.S.) AICPAstore.com

(Outside the U.S.) CGMAstore.com


CONTACT A TRAINING REPRESENTATIVE:


1-800-634-6780 Option 1
aicpalearning@aicpa.org