BV196-WEB - Valuation of Inventory: Simplifying All of the Guidance

Registration

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Webinar Course Description

With divergence in practice and varying sources of guidance, inventory valuation can often seem daunting. In this webinar, we will propose simple, straightforward modifications to the valuation of inventory that you can incorporate into your valuation process.

We will first review what comprises the book value of inventory and valuation guidance from the FASB, the IRS, and the AICPA. Next, we will walk through an example valuation of raw materials, work-in-progress, and finished goods in accordance with this guidance. The example provided will reconcile the top-down (comparative sales) and bottom-up (cost of reproduction) methods. Finally, we will illustrate how to account for product- and process-specific profit and expenses, reconcile to market participant data, and adjust supporting assets so as to not double-count profit.

Recommended Pre-readings

Working Draft of Inventory Valuation Guidance from Forthcoming AICPA Accounting and Valuation Guide Business Combinations

Accounting Today: A Refined Approach to Inventory Valuation (https://www.accountingtoday.com/opinion/a-refined-approach-to-inventory-valuation)

Course Audience

Valuation specialists and other parties interested in performing inventory valuation analyses (under Fair Market Value and Fair Value Standards).

NASBA and Continuing Professional Education (CPE) Credit

The American Society of Appraisers is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have the final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website www.learningmarket.org.

CPE Credit: (2) Hours in Specialized Knowledge
Program Level: Intermediate
Delivery Method: Group-internet based courses are approved for CPE
Prerequisites: None
Advanced Preparation: None
Policies: ASA's Refund and Cancellation Policy and ASA's Complaint Resolution Policy

Instructor Information

Anthony Pumphrey , ASA | Vice President | Valuation Research Corporation

Anthony Pumphrey, ASA, CFA is Vice President of Valuation Research Corporation. Mr. Pumphrey has 10+ years of experience performing business enterprise valuations, purchase price allocations, impairment analyses, and the valuation of claims within complex capital structures for public and private companies under IRC 409a, ASC 350, ASC 360, ASC 718, ASC 805, ASC 820, and ASC 852. Prior to joining VRC, Mr. Pumphrey was with Hempstead & Co., where he provided valuation opinions for estate and gift tax planning, financial reporting, employee stock ownership plans, litigation support, and the issuance of incentive stock options.

Agenda

The following topics are covered in this course:

• What Is Inventory? Definitions, Costs, and Other Attributes of Book Value
• Review of Guidance (FASB, IRS, and AICPA) on the Valuation of Inventory
• ValuationMethodologies and Considerations in Practice
• Valuation Example and Tests of Reasonableness
• Impact on other Elements of an ASC 805 Analysis

Learning Outcomes

Upon completion of this course,students will be able to:

• Understand what is included in the book value of inventory, prior to valuation;
• Implement the guidance into the valuation process in a straightforward manner;
• Apply the comparative sales and cost of reproduction methods and clearly identify the components of the step-up; and
• Reconcile the step-up components, supporting assets, and overall analysis with other remaining assets in a business combination.