FASB Accounting Standards Codification

FASB ASC CITATION:Adjustments to Lower of Cost or Market330-10-35-1 A departure from the cost basis of pricing the inventory is required when the utility of the goods is no longer as great as their cost. Where there is evidence that the utility of goods, in their disposal in the ordinary course of business, will be less than cost
The inventory has a financial importance as it is purchased and recorded at its historical cost or original cost. With respect to a perpetual inventory system, inventory accounts are continually controlled as goods are purchased and placed directly into the inventory account and then later taken out when sold. Therefore the inventory is properly recognized within the period it is sold. Furthermore…show more content…With respect to the facts stated on the lands current progress the interest incurred can not be capitalized.
Question 3: You are to allocate an asset retirement cost (initiated by an asset retirement obligation). What guidance is given over the manner in which the asset retirement cost should be allocated to expense? 
FASB ASC CITATION: 410-20-35-2 An entity shall subsequently allocate that asset retirement cost to expense using a systematic and rational method over its useful life.
Asset retirement obligation requires properly allocating the asset retirement cost over the assets life of the asset. The allocation of asset retirement cost that is initiated by the asset retirement obligation includes items that that fall under FASB’s issued Statement of Financial Accounting Concepts also known as SFAC No. 6 “Elements of Financial Statements. The proper manner of allocating requires the retirement cost to be properly measured, recognized, and recorded when involving elements in the financial statements. The measurement of the asset must be measured properly at its historical cost. During the ordinary process a business has outflows or using up of its assets in which the expenses are then recognized under the SFAC No.6 as Expense Recognition Principle. During the period the assets are used up from operational procedures (delivery, and production). The expense accounts recognize

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