Inventory — ASC 330 vs IAS 2

Both ASC 330 (US GAAP) and IAS 2 (IFRS) measure inventory at the lower of cost and a recoverable ceiling, but they diverge on the permitted cost-flow assumptions and on whether write-downs can be reversed — differences that flow straight into a multinational’s parallel valuations.

• Cost includes purchase cost, conversion cost, and the costs of bringing inventory to its present location and condition.
• Cost-flow assumption — FIFO and weighted-average are permitted under both; LIFO is permitted under US GAAP only.
• Measurement ceiling — written down when the carrying amount is not recoverable.

Area	US GAAP (ASC 330)	IAS 2
LIFO	Permitted (with a LIFO reserve)	Prohibited
Measurement ceiling	Lower of cost or market (LIFO/retail); LCNRV otherwise	Lower of cost or net realizable value (LCNRV)
Write-down reversal	Prohibited	Required when NRV recovers (up to original cost)

LIFO and the no-reversal rule are the big comparability items — they affect cost of sales, tax (LIFO reserve), and the recovery accounting an IFRS ledger must make that a US ledger cannot.

• NRV estimation — selling price less costs to complete and sell.
• Cost capitalization — which overheads and what normal-capacity absorption.
• Write-down triggers and reversal (IFRS) — evidence that NRV has recovered.

• SAP implementation: SAP Material Ledger / actual costing. Note: IFRS write-down reversals need a process a US-GAAP ledger forbids — a key parallel-ledger divergence.

An educational reference and original synthesis — not investment advice, and not a substitute for the standard or for professional accounting guidance. For authoritative measurement detail, consult ASC 330 / IAS 2 directly.