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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Comparative Analysis: Under Armour, Inc., vs. Columbia Sportswear

Refer to the 10-K reports of Under Armour, Inc., and Columbia Sportswear that are available for download from the companion website at CengageBrain.com.

Required:

Do Under Armour and Columbia use the lower of cost or market method to account for their inventories? By what amount have they written inventories down in the fiscal year ending December 2016?

To determine

Lower of expense or market (LCM) The lower of expense or market choose states that a business must record the expense of inventory at whichever cost is lower − the main expense or its present market cost. Net possible regard is described as the surveyed selling esteem, short assessed expenses of completing and exchange.

To discuss:

Do Under Armour and Columbia use the lower of cost or market method to account for their inventories? By what amount have they written inventories down in the fiscal year ending December 2016?

Explanation

Under the Under Armour, Inc

Market esteem is assessed dependent on suspicions made about future interest and retail economic situations. In the event that we discover that the evaluated market estimation of our stock is not exactly the conveying estimation of such stock, we record a charge to cost of merchandise sold to mirror the lower of expense or market. In the event that genuine economic situations are less positive than those that we anticipated, further changes might ...

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