Question
What does a disclosed inventory write-down or reversal tell an analyst?
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Answer
Inventory values changed materially and reported profit was affected.
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Question
Why is inventory classification disclosure into raw materials, WIP, and finished goods useful?
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Answer
It shows where inventory is concentrated in the production cycle.
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Question
Why is the LIFO reserve an important disclosure for a US GAAP filer?
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Answer
It lets analysts compare LIFO results to FIFO.
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Question
Why must analysts know the inventory cost flow assumption used?
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Answer
It affects COGS, ending inventory, and profit comparability.
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