Jones Co. is in a technology-intensive industry. Recently, one of its competitors introduced a new product with technology that might render obsolete some of Jones’s inventory. The accounting staff wants to follow the appropriate authoritative literature in determining the accounting for this significant market event.

Instructions

Access the IFRS authoritative literature at the IASB website ( http://eifrs.iasb.o r g/ ). (Click on the IFRS tab and then register for free eIFRS access if necessary.) When you have accessed the documents, you can use the search tool in your Internet browser to respond to the following questions. (Provide paragraph citations.)

(a) Identify the authoritative literature addressing inventory pricing.

^{(b) List th r ee types of goods that a r e classified as inventor y . What characteristic will automatically}

^{exclude an item f r om being classified as inventory?}

^{(c) Define “net r ealizable value” as used in the phrase “lowe r -of-cost-o r -net r ealizable value.”}

(d) Explain when it is acceptable to state inventory above cost and which industries allow this practice.