What critical assumptions has TESLA made to value inventory? Does TESLA use FIFO or LIFO? Explain what is LCM (the lower of cost or market) and how this may impact inventory every year. During the years ended December 31, 2019, 2018 and 2017, we recorded write-downsof $138 million, $78 million and $124 million, respectively, in cost of revenues.Our inventory consisted of the following (in $millions):8DecemberDecember31, 201931, 2018Raw materials1,428932Work in processFinished goodsService parts3622971,3561,581406303Total3,5523,113

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Description: What critical assumptions has TESLA made to value inventory? Does TESLA use FIFO or LIFO? Explain what is LCM (the lower of cost or market) and how this may impact inventory every year. During the years ended December 31, 2019, 2018 and 2017, we reco

Inventory Valuation There are different method which are adopted in the valuation of the inventory.…

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What critical assumptions has TESLA made to value inventory? Does TESLA use FIFO or LIFO? Explain what is LCM (the lower of cost or market) and how this may impact inventory every year.

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

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What critical assumptions has TESLA made to value inventory? Does TESLA use FIFO or LIFO? Explain what is LCM (the lower of cost or market) and how this may impact inventory every year.

During the years ended December 31, 2019, 2018 and 2017, we recorded write-downs
of $138 million, $78 million and $124 million, respectively, in cost of revenues.
Our inventory consisted of the following (in $millions):8
December
December
31, 2019
31, 2018
Raw materials
1,428
932
Work in process
Finished goods
Service parts
362
297
1,356
1,581
406
303
Total
3,552
3,113

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