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AICPA: Working Draft on Inventory Valuation Guidance out for public comment

On November 19, 2018, the AICPA has issued an early working draft of the Inventory Valuation Guidance as part of a broader forthcoming release of the AICPA’s Business Combinations Accounting and Valuation Guide. This working draft provides nonauthoritative guidance and illustrations for preparers of financial statements, independent auditors, and valuation specialists regarding how to estimate the fair value of inventory acquired in a business combination in accordance with Financial Accounting Standards Board (FASB) ASC 820, Fair Value Measurement. This guidance is focused on measuring fair value of inventory for financial reporting purposes. This inventory valuation guidance (which will ultimately be included in the broader guide) consists of a section, which provides general principles for valuing inventory, and two examples, which illustrate how to value finished goods and work in process inventory. It also offers questions and answers that illustrate some of the inventory valuation considerations discussed in the preceding sections. Interested parties are encouraged to review the working draft and submit their comments. All comments will be kept confidential and will not be posted on the AICPA Web site. If you would like to provide comments, please e-mail them to Yelena Mishkevich at by February 1, 2019.