Inventory IAS 2 Flashcards
1
Q
What is the Valuation Rule
A
Inventory is measured at lower of cost or net realisable value (NRV)
2
Q
How is NRV calculated
A
Estimated selling price
Less Estimated Cost of Completion
Less Estimated Cost necessary to make the sale
3
Q
What should the cost of inventories include
A
Cost of purchase
Cost of conversion
All other costs incurred in bringing inventory to present location and condition
4
Q
What amounts are excluded from cost of inventories
A
Abnormal amounts of wastage
Storage Costs
Selling expenses
Generl admin overheads
5
Q
True or False: LIFO is permitted as a formula
A
False
