FMN Accounting

FMN - 2021/September, Seg 1 - Is It Time to 'Retire' Full Costing?

Contemporary cost accounting for manufactured inventories is based on 73-year-old Generally Accepted Accounting Principles (GAAP). With overhead as a percentage of total manufactured costs having increased significantly since the original rule was developed, the opportunity for "earnings management" in financial statements has also increased. The implications are broad and do not impact only manufacturing companies. Jonathan Schiff, PhD and professor of accounting at Fairleigh Dickinson University, makes the case to reconsider this aspect of GAAP with a view towards improving alignment with the current business reality.

Learning Objectives:

  • Describe the problems encountered with full absorption accounting;
  • Recognize how the percentage of overhead to total manufactured costs has changed;
  • Identify the risks presented by use of full absorption accounting under today's GAAP; and
  • List examples of earning management.


Prerequisites/Advanced Preparation:

Work experience in financial reporting or accounting, or an introductory course in accounting.


Speaker / Author:

Jonathan B. Schiff
Jonathan B. Schiff, CMA, Ph.D., is professor of accounting at Fairleigh Dickinson University in New Jersey and advises companies on a variety of finance, accounting, and leadership development practices. He is a member of IMA’s Bergen-Rockland-Meadowlands Chapter. You can reach him at schiff@fdu.edu.

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Price (USD)

Standard: $69.90

Details

Course Code : FMN1412-FM

Release Date : 09/08/2021
Expire Date : 04/14/2023
Credits :
CPE 2.00
QAS 2.00

Course Level : Update
Length : 1hr 40min
Course Type : QAS Self-Study

Passing Grade : 70%
Format Type : eLearning
Mobile Compatible
Field Of Study : Accounting

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