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The AICPA's Financial Reporting Executive Committee has released a working draft on Inventory Valuation guidance, which will be part of the upcoming release of its Business Combinations Accounting and Valuation Guide.

The working draft outlines the various considerations for estimating the fair value of inventory acquired in a business combination in accordance with Financial Accounting Standards Board (FASB) ASC 820, Fair Value Measurement. The draft is intended for preparers of financial statements, independent auditors, and valuation specialists. 

The inventory valuation guidance consists of a section of general principles for valuing inventory and two illustrative examples on valuating finished goods and work in process inventory. In addition, the authors have included a questions and answers section intended to explain certain concepts related to inventory valuation.

The draft will undergo a period of public review for further considerations by the committee before final publication. Comments on the working draft are due by Feb. 1, 2019. 

To view a copy of the draft, click here