FM038: Inventory Accounting and Costing

Transcription

1 FM038: Inventory Accounting and Costing FM038 Rev.001 CMCT COURSE OUTLINE Page 1 of 5

2 Training Description: Whether you are a trader, manufacturer, contractor or a service provider, inventory has a major impact on your net income and on the balance sheet. In this course, participants are guided step by step through best practices of the purchasing process, the allocation of direct costs, indirect costs and production costs and comparisons between the different cost flow assumptions such as FIFO, LIFO and weighted average cost along with their impact on the financials and the physical counting of goods. We will discuss the importance of having accurate inventory figures reflect the net realizable value, use Excel and pivot tables to analyze inventory balances, calculate values of obsolete inventory and simulate calculations of weighted average cost. Training Objective: By the end of the training, participants will be able to: List different types and reasons to hold inventory and construct the overall inventory cycle from purchase to sales Justify differences between perpetual and periodic inventory methods and evaluate inventory cost allocation techniques Recognize and correctly measure inventory under International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP) Explain the proper use of write downs, write backs and impact of change in inventory accounting policies on financial statements Apply professional judgment in accounting for inventory not on hand Categorize different inventory cost flow assumptions and describe how they affect the company s financial position and income statement Outline the various approaches for cost accounting Use Excel and pivot table tools and techniques to analyze inventory and calculate weighted average costs Training Designed for: This course is intended for all Inventory Professionals, including Supervisors, Account Managers, Purchasing and Facility Supervisors and Coordinators, Financial Controllers, New Employees handling inventory, Internal Auditors, Warehouse Assistants and Managers, and Operations Managers. Training Program: DAY ONE: PRE-TEST Introduction to Inventory Current assets and inventory management The four reasons for keeping inventory FM038 Rev.001 CMCT COURSE OUTLINE Page 2 of 5

3 Inventory cycle from purchases to sales: o Ordering and receiving o Sales and delivery o Best practices in count process Inventory industry types: merchandise, manufacturing, construction and real estate Differences between inventory, fixed assets and investment properties Understanding and analyzing inventory ratios DAY TWO: Accounting for Inventory Perpetual versus periodic inventory methods Cost accounting versus financial accounting o Cost allocation techniques: o Direct material, direct labor and manufacturing overhead o Initial recognition o Cost of purchase, cost of conversion and treatment of discounts and rebates received Measurement after recognition o Calculating 'net realizable value' (IFRS) o Calculating market price under the Lower of Cost or Market (LCM) method (GAAP) o Estimating and booking write downs for slow moving and obsolete inventory o Accounting for write backs of impairment under IFRS and GAAP Accounting for errors identified in physical count DAY THREE: Accounting for Inventory: Special Topics Accounting for inventory not on hand On consignment Goods in-transit: defining incoterms Sold with right of return Sold subject to installation and inspection Sold on a 'bill and hold' basis The concept of 'inventory credit': inventory used as collateral to raise finance Impact of accounting policies changes on financial statements Inventory required disclosures DAY FOUR: Inventory Cost Flow Assumptions First-in First-out (FIFO) and Last-in First-out (LIFO) Weighted average and moving average Specific identification FM038 Rev.001 CMCT COURSE OUTLINE Page 3 of 5

4 DAY FIVE: Inventory Estimation and Cost Accounting Approaches Inventory estimation techniques o Gross profit method o Retail method Cost accounting approaches o Traditional costing versus activity based costing o Target costing versus cost plus pricing method o Standard cost accounting o Throughput accounting Using Excel for efficient analysis of inventory o Consolidating your inventory data o Validating data for accuracy o Analyzing slow moving and obsolete inventory o Tests of recalculating weighted average and moving average costs o Using pivot tables to efficiently analyze and report on inventory issues Course Conclusion POST-TEST and EVALUATION Training Requirement: Hand s on practical sessions, equipment and software will be applied during the course if required and as per the client s request. Training Methodology: This interactive training course includes the following training methodologies as a percentage of the total tuition hours:- 30% Lectures, Concepts, Role Play 30% Workshops & Work Presentations, Techniques 20% Based on Case Studies & Practical Exercises 20% Videos, Software & General Discussions Pre and Post Test Training Certificate(s): Internationally recognized certificate(s) will be issued to each participant who completed the course. Training Fees: As per the course location - This rate includes participant s manual, hand-outs, buffet lunch, coffee/tea on arrival, morning & afternoon of each day. FM038 Rev.001 CMCT COURSE OUTLINE Page 4 of 5

5 Training Timings: Daily Timings: 07:45-08:00 Morning Coffee / Tea 08:00-10:00 First Session 10:00-10:20 Recess (Coffee/Tea/Snacks) 10:20-12:20 Second Session 12:20-13:30 Recess (Prayer Break & Lunch) 13:30-15:00 Last Session For training registrations or in-house enquiries, please contact: Aisha Relativo: aisha@cmc-me.com Tel.: or Mob.: Training & Career Development Department FM038 Rev.001 CMCT COURSE OUTLINE Page 5 of 5