7.09- Inventory under IFRS

Question 1

What is the IFRS version of LCM?

Answer 1

Lower of Cost or Net Realizable Value

Question 2

What is included in COST for IFRS?

Answer 2

• Cost of purchase
• Cost of coversion
• Other costs incurred to bring the inventory to its current place

Question 3

Can you CAPITALIZE borrowing costs under IFRS?

Answer 3

Under limited circumstances… yes!

Question 4

Is FIFO allowed under IFRS? LIFO? Weighted average?

Answer 4

Fifo= yes!
Lifo= NO!
Weighted average= yes!

Question 5

When are LOSSES and WRITE-DOWNS recognized under IFRS? Can these be Reversed?

Answer 5

• In the period of occurrance

- Reversals are allowed under IFRS

Question 6

What is the journal entry for a LOSS RECOVERY under IFRS?

Answer 6

• Debit= inventory

- Credit= Recovery of inventory loss