ACCOUNTING TERMS - ACCOUNTING DICTIONARY - ACCOUNTING GLOSSARY
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INVENTORY VALUATION Definition
INVENTORY VALUATION is the process of assigning a financial value to on-hand inventory, based on standard cost, first-in, first-out (FIFO), last-in, first-out (LIFO), average list price or other method. The method used is determined by a requirement to meet legal or other standards specified by a third party, or by an operational measure found to be useful in analyzing inventory positions.
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EFFECTIVENESS is producing a desired outcome. An audit procedure is effective if the evidence supports a correct conclusion.
FIXED COST is a cost that does not vary depending on production or sales levels, such as rent, property tax, insurance, or interest expense.