The International Institute for Science, Technology and Education (IISTE)
Abstract
The IFRS has streamlined the basis for valuing inventory against that which was hitherto posited by the Statement of Accounting Standards (SAS) or the US GAAP. These methods have far reaching implications for the value of inventory firms would report in their financial statements. This paper has examined those methods adopted by the International Financial Reporting Standards (IFRS) and there would be implication on financial reporting in Nigeria. The study was conceptual and empirical with most data sourced from the relevant text book and the internet. A survey was also carried out to know the level of awareness of this adoption and level of compliance. The study revealed that though some companies has adopted the use of FIFO method but a good number are still using the LIFO method which was proscribed by IFRS. The study recommends that firms should adopt the use of FIFO and Weighted Average Methods as prescribed by IASB and the others permitted by IFRS. This will make their financials comparable under the IFRS while firms should embark on intensive training of their accounting staff to get them to becoming IFRS compliant. Key words: Inventory, Valuation, Financial Reporting, IASB, IFR
