IND AS 2 - Inventories Flashcards
Vanessa Private Ltd is into trading of cake mix. The cake mix is sold in boxes of different capacities like 200 gms, 500 gms and 1000 gms..
Whether these boxes will fall within the meaning of inventory, as per Ind AS 2, and how will they be valued?
1: Yes. Since, they are used in the process of production for sale. They will be valued at lower of cost or NRV.
2: No. They will not qualify as inventory and will be valued at NRV.
3: No. They will not qualify as inventory and will be valued at lower of cost or NRV.
4 : Yes. Since, they are used in the process of production for sale. They will be valued at NRV.
Yes. Since, they are used in the process of production for sale. They will be valued at lower of cost or NRV.
The primary packing material is included within the scope of the term ‘materials and supplies awaiting use in the production process’ hence included as per Ind AS 2. The primary packing material is one which is essential to bring an item of inventory to its saleable condition, for example, bottles, cans etc., in case of food and beverages industry.
