Inventory Accounting and Costing|Online

Overview

Why Attend

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.

Course Methodology

The course uses a mix of interactive techniques such as brief presentations by the consultant, group exercises and case studies using Excel to apply knowledge acquired throughout the course followed by participants' presentations of the result.

Course Objectives

By the end of the course, 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

Target Audience

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.

Target Competencies

Accounting for inventory transactions
Financial reporting of inventory balances
Applying professional judgment for special cases
Analyzing inventory movement
Using Excel and pivot tables

Note

This is a hands-on training course using laptops which will be made available by Smart for the duration of the training. For courses outside the UAE, participants should bring their won laptops equipped with a fully functional version of MS Excel 2010/2013.

Course Outline

Introduction to inventory
- Current assets and inventory management
- The four reasons for keeping inventory
- Inventory cycle from purchases to sales:
  - Ordering and receiving
  - Sales and delivery
  - 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
Accounting for inventory
- Perpetual versus periodic inventory methods
- Cost accounting versus financial accounting
  - Cost allocation techniques:
    - Direct material, direct labor and manufacturing overhead
  - Initial recognition
    - Cost of purchase, cost of conversion and treatment of discounts and rebates received
- Measurement after recognition
  - Calculating 'net realizable value' (IFRS)
  - Calculating market price under the Lower of Cost or Market (LCM) method (GAAP)
  - Estimating and booking write downs for slow moving and obsolete inventory
  - Accounting for write backs of impairment under IFRS and GAAP
- Accounting for errors identified in physical count
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
Inventory cost flow assumptions
- First-in First-out (FIFO) and Last-in First-out (LIFO)
- Weighted average and moving average
- Specific identification
Inventory estimation and cost accounting approaches
- Inventory estimation techniques
  - Gross profit method
  - Retail method
- Cost accounting approaches
  - Traditional costing versus activity based costing
  - Target costing versus cost plus pricing method
  - Standard cost accounting
  - Throughput accounting
- Using Excel for efficient analysis of inventory
  - Consolidating your inventory data
  - Validating data for accuracy
  - Analyzing slow moving and obsolete inventory
  - Tests of recalculating weighted average and moving average costs
  - Using pivot tables to efficiently analyze and report on inventory issues

Schedule & Fees

2026 Schedule & Fees

25 - 29 Oct, 2026

English
Virtual Learning

Per participant USD 1,300

25 - 29 Oct, 2026

Arabic
Virtual Learning

Per participant USD 1,300

29 Nov - 3 Dec, 2026

English
Virtual Learning

Per participant USD 1,300

29 Nov - 3 Dec, 2026

Arabic
Virtual Learning

Per participant USD 1,300

2027 Schedule & Fees

24 - 28 Jan, 2027

Arabic
Virtual Learning

Per participant USD 1,300

24 - 28 Jan, 2027

English
Virtual Learning

Per participant USD 1,300

28 Feb - 4 Mar, 2027

English
Virtual Learning

Per participant USD 1,300

28 Feb - 4 Mar, 2027

Arabic
Virtual Learning

Per participant USD 1,300

25 - 29 Apr, 2027

English
Virtual Learning

Per participant USD 1,300

25 - 29 Apr, 2027

Arabic
Virtual Learning

Per participant USD 1,300

30 May - 3 Jun, 2027

Arabic
Virtual Learning

Per participant USD 1,300

30 May - 3 Jun, 2027

English
Virtual Learning

Per participant USD 1,300

25 - 29 Jul, 2027

Arabic
Virtual Learning

Per participant USD 1,300

25 - 29 Jul, 2027

English
Virtual Learning

Per participant USD 1,300

29 Aug - 2 Sep, 2027

English
Virtual Learning

Per participant USD 1,300

29 Aug - 2 Sep, 2027

Arabic
Virtual Learning

Per participant USD 1,300

24 - 28 Oct, 2027

English
Virtual Learning

Per participant USD 1,300

24 - 28 Oct, 2027

Arabic
Virtual Learning

Per participant USD 1,300

28 Nov - 2 Dec, 2027

Arabic
Virtual Learning

Per participant USD 1,300

28 Nov - 2 Dec, 2027

English
Virtual Learning

Per participant USD 1,300