Question

Berry Plastics is a manufacturer. Berry has inventory consisting of raw materials, work in process and finished goods totaling $24 million. Is Berry required to report the amounts for each class of inventory or can it just report the total of $24 million? Prepare a memo to me explaining your answer. You must provide Codification references to support your answer or you will receive a You answer should be in the FIRAC format discussed in the video or in class.

Do not be creative here! Facts Issue(s) (typically a question) Review of authoritative literature (ASC) Analysis (link the facts to the authority) Conclude (answer the issue question)

Answer 1

Here are the points you can mention in your memo:

Barry Plastics needs to disclose following into his financial statements regarding inventory:

• accounting policy for inventories
• carrying amount, generally classified as merchandise, supplies, materials, work in progress, and finished goods. The classifications depend on what is appropriate for the entity
• carrying amount of any inventories carried at fair value less costs to sell
• amount of any write-down of inventories recognised as an expense in the period
• amount of any reversal of a write-down to NRV and the circumstances that led to such reversal
• carrying amount of inventories pledged as security for liabilities
• cost of inventories recognised as expense (cost of goods sold).

Well I do not have Codification references (as I do not have subsciption to the website of FASB) to support these of FASB nor I know which video is being referred in the question, Though the above points are prescribed by IAS 2 and also followed by FASB for US GAAP. You can incorporate these into your final memo and give the codes as discussed in the video