12/26/2023 0 Comments Inventory writedown cogs![]() The write off suggests that the costs for that inventory will never be recovered. So even tho I understand their reasoning, it's still ambiguous in terms off the timing of the write-off entry. So the ending inventory figure would still reflect the $34,000, until it is written off. An integrated inventory accounting system would only take the physical COGS to that account, in real time. I agree with Jason - it would be far more logical to assume that the ending inventory balance reflects the inventory write off. It should increase COGS if it taken above the line. How can written off inevntory reduce CCOGS. ![]() The written-off amount cannot go to the COGS amount, but rather it is an extraordinary amount. Without the written-off, the ending inventory would be 34000 + 30000 = 64000. I think $184,000 is the accounting COGS, and $150,000 is the real COGS. ![]() The write-off effect should be already taken into the ending inventory figure. The question should be what is the real physical COGS. For example, CISCO had 2.2 billion inventory write-off, the same period COGS increased by 2.2 billion. Intuitively, when you have inventory write-off, COGS should increase in accounting term (more cost associate with sales).
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