IAS 2 Flashcards
FIFO calculation?
Purchase 1: 100 widgets at $5 each
Purchase 2: 150 widgets at $6 each
Purchase 3: 200 widgets at $7 each
If the company sells 120 widgets, under FIFO:
100 widgets at $5 each
20 widgets at $6 each
How to calculate weighted average cost per unit?
Total costs of goods available for sale / Total number of units available for sale
Weighted average cost per unit calculation?
Purchase 1: 100 units at $5 each
Purchase 2: 150 units at $6 each
Purchase 3: 200 units at $7 each
(100* 5 + 150 * 6 + 200 * 7)/(100+150+200)
When are inventories no longer recognised as an asset?
Until they are sold
Asset derecognised
Expense (Cost of sales) is recognised
What is NRV?
Selling price - costs of completion - costs necessary to make the sale (e.g. marketing, selling, distribution)
How should inventories be valued?
At lower the cost and NRV
What can costs of completion and costs necessary to make sale known as?
Adjustment costs
If two costs figures are used in question?
Usually relates to NRV and original cost
What do costs of inventories comprise of?
Costs of conversion
Costs of purchase
Costs of conversion?
Direct materials and labour
Sub-contracted work
Systematic allocation of fixed and variable overheads
Costs of purchase?
Purchase price - trade discount - rebates
Import duties
Directly attributable costs
What are import duties?
A direct cost associated with bringing goods into a country
What is the closing inventory?
Value of unsold goods or products remaining in possession of a business at end of reporting period
Amonut of inventory when there is a markup cost?
Sales of inventory / (1 + mark-up percentage)
How are fixed production overheads included?
Based on a normal basis,, not actual basis
