FIFO is the acronym for First-In, First-Out. It is a cost flow assumption usually associated with the valuation of inventory and the cost of goods sold. Under FIFO, the oldest costs will be the first costs to be removed from the balance sheet account Inventory and will be the first costs to be included in the cost of goods … Read the rest
COST OF INVENTORY
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
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.
i) Explain Inventories.
ii) Explain how inventories are measured and valued in … Read the rest