Project 2: Three Little Pigs Case Study (15 points)
Thursday, March 11 (at beginning of class). Also, please be prepared to discuss the case and your group’s solution in class on this date.
Please work in groups of 3-5 students (submit 1 discussion per group). You may select your own groups. Please contact me if you are having difficulty finding a group.
First, prepare a discussion outlining the alternatives for determining whether inventory impairment exists in the Three Little Pigs case. Second, if the company determines that an impairment of inventory is necessary, prepare a discussion outlining the alternatives for determining whether the impairment should be recognized in an interim period. Relying on the applicable guidance, discuss the appropriate way for Three Little Pigs to evaluate and recognize inventory impairment. Your discussion should include cites to the applicable guidance and how it applies to Three Little Pigs’ transactions. Your discussion should be no more than 3 pages in length.
Applicable Professional Pronouncements:
ASC 270, Interim Reporting (Accounting Principles Board Opinion 28, Interim Financial Reporting) ASC 330, Inventory (Accounting Research Bulletin 43, Restatement and Revision of Accounting Research Bulletins (ARB 43) as amended by FASB Statement No. 151, Inventory Cost. and Emerging Issues Task Force 86-13, Recognition of Inventory Declines at Interim Reporting Dates (EITF 86-13)) ASC 905, Agriculture (Statement of Position 85-3, Accounting by Agricultural Producers and Agricultural Cooperatives (SOP 85-3) AICPA Audit and Accounting Guide, Agricultural Producers and Agricultural Cooperatives (APC))
1. Your discussion should begin by discussing alternatives for determining whether an inventory impairment exists at September 30, 2002. There are at least 2 alternative ways to think about the level at which inventory should be examined for...
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