Inventory

Question 1

What is the purpose of Ipsas 12 ?

Answer 1

• To set standards to recognise costs and expenses in Inventory
• Obliges entities using accrual accounting to use these standards
• Applies to all public sector entities

Question 2

Ipsas 12 does not apply to:

Answer 2

Work-in Progress,
Financial Instruments,
Agricultural assets / Products
Commoduty Broker-Traders

Question 3

Current Replacement Cost means:

Answer 3

The cost the entity would incur to acquire the asset on the reporting date

Question 4

Inventories are assets for:

Answer 4

• Consumption in the production process
• For consumption in the rendering of services
• Held for sale or redistribution

Question 5

Net realisable value means:

Answer 5

The net amound an entity expects to realise from the sale of inventory

Question 6

Typical Inventories Include

Answer 6

Goods purchased and held for resale
Merchandise
Land for sale
Finished Goods produced
Materials and Supplies
Cost of Service

Question 7

Public Service Inventories may include

Answer 7

Ammunition
Consumable Stores (Stationery)
Maintenance Material
Spare parts for plant and equipment
Strategic Stockpiles (Energy Reserves)
Unissued currency
Postal Service Supplies

Question 8

How is the trading account comprised ?

Answer 8

• Sales
• Less Cost of Sales
• Opening Inventory
• Add Purchasis
• Closing Stock
• Gross Profit