Measuring inventory Flashcards

1
Q

What must the carrying value of inventory be?

A

lower than its cost price or net realisable value

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2
Q

Why does measuring inventory at cost require a cost flow assumption?

A

because inventory can be purchased at different times at different cost prices

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3
Q

2 cost assumptions (permitted under IFRSs)

A

○ First-in, First-out (FIFO)

○ Weighted average

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4
Q

What is the net realisable value of inventory?

A

the expected selling price, less the expected costs associated with getting the inventory to a saleable state, plus the costs of marketing, selling and distribution

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