IAS 2 (inventories) set out the accounting treatment for inventories, including the determination of cost, the subsequent recognition of the expense and any write-down to Net Realizable Value (NRV)
Inventory according to IAS 2 are assets that are :
Esinam Ltd has the following products in inventory at the end of 2016:
| Units | Cost per unit Tsh | |
| Ahomka (completed) | 5,400 | 22 |
| Adonko (part complete) | 2,800 | 26 |
Each product normally sells at Tsh 34 per unit. Due to the difficult trading conditions, Esinam Ltd intends to offer a discount of 15% per unit and expects to incur Tsh 4 … Read the rest
The objective of IAS 2 Inventories is to prescribe the accounting treatment for inventories and provide guidance for measuring and valuation of inventories. It determines the cost of inventories and subsequent recognition as an expense, including any write-down to net realisable value.
Required:
i) Explain Inventories.
ii) Explain how inventories are measured and valued in … Read the rest
Inventories, per paragraph 6 of IAS 2 are assets that are
Held for sale in the ordinary course of business
In the process of production for such sale; or
In the form of materials or supplies to be consumed in the production process or in the rendering of services.
Inventories per IAS 2 comprise
a) Merchandise
b) Production Supplies
c) … Read the rest
