GFS 10

When is an accrual required for Net Realizable Value (NRV) calculation?

• An accrual must be taken when the FIFO value, excluding intercompany profit and non-working inventory accrual, is lower than the net realizable value
• An accrual must be taken when the FIFO value, including intercompany profit and non-working inventory accrual, is higher than the net realizable value
• An accrual must be taken if the FIFO value, excluding intercompany profit and non-working inventory accrual, is higher than the net realizable value

Which entry is made for Legacy Net Realizable Value (NRV) Accrual if an accrual is required?

• Cr Inventory NRV Reserves 14XXXX, Dr Inventory Change Reserve 709XXX
• Cr Inventory NRV Reserves 145XXXX, Dr Inventory Change 709201
• Dr Inventory NRV Reserves 14XXXX, Cr Inventory Change Reserve 709XXX

The regular Net Realizable Value (NRV) inventory for Excess Level is?

• A regular NRV inventory for Excess Level with no usage in 6 month or more
• A regular NRV inventory for Excess Level when there are between 6 to 12 months of "stock on hand"
• A regular NRV inventory for Excess Level when there are more than 12 months of "stock on hand"

Using a high-level process for Net Realizable Value (NRV) calculation in legacy considerations the requirements are next:

• The average selling price and standard cost should be reviewed every quarter, an accrual should be taken on a monthly basis
• The average selling price and standard cost must be reviewed at least annually, the accrual may be taken quarterly and recommended on profit centers which have % net factory at above 90% to sale as these will more likely have NRV accrual requirement
• A high level process is not required for Net Realizable Value (NRV) calculation

How is the value of non-capitalizable costs excluded from the manufactured and semi-finished inventory valuation?

• The value of non-capitalizable costs is based on percentages determined at a country or area level, calculated annually in Q1
• The value of non-capitalizable costs is based on percentages determined at a country or area level, calculated quarterly in Q1
• The value of non-capitalizable costs is based on percentages determined at a product level, calculated annually in Q4

Which profit center is used for accounting entries of non-capitalizable costs in order to avoid impacting Days Inventory Outstanding at the individual?

• Profit center 2730
• Profit center 9110
• None of mentioned

Which costs need to be adjusted if they were included in standard and actual costs and capitalized due to system and process limitations?

• Certain costs associated with raw materials used in the production process, such as direct labor and overhead costs
• Certain costs associated with finished goods which are ready for sale, such as warehousing and interplant freight
• Certain costs associated with sales and marketing activities, such as advertising and promotional expenses

What are the three categories of non-working inventory?

• Dead inventory, Excess inventory, Slow-moving inventory
• Excess inventory, Dead inventory, Raw materials inventory
• Obsolete inventory, Finished goods inventory, Slow-moving inventory

What level of calculation is acceptable for non-working inventory in legacy when the system cannot differentiate between plants?

• Calculating by plant and 3MID
• Calculating by SKU (Stock Keeping Unit) and obtaining approval from the Country Finance Manager
• Calculating by legal entity and 3MID

What is the timeline for creating a disposition plan for dead or excess inventory?

• The disposition plan must be created within 60 days of the item being identified as dead or excess
• The disposition plan must be created within 90 days of the item being identified as dead or excess
• There is no specific timeline for creating a disposition plan for dead or excess inventory