COST OF INVENTORY

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IAS 2- INVENTORIES – ALL YOU NEED TO KNOW.

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)

So what is the inventory?

Inventory according to IAS 2 are assets that are :

  • Held for sale in the ordinary course of business
  • are in the process of production for
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Revision question on Financial accounting – IAS 2.



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