VAS 03

Question 1

What are Inventories?

Answer 1

Assets which are:

• held for sale in the normal production and business period;
• in the on-going process of production and business;
• raw materials, materials, tools and instruments for use in the process of production and business or provision of services.

Question 2

Which Inventories consist of:

Answer 2

• Goods purchased for sale: goods in stock, purchased goods being transported en route, goods sent for sale, goods sent for processing;
• Finished products in stock and finished products sent for sale;
• Unfinished products: incompleted products and completed products not yet going through the procedures for being put into stores of finished products;
• Raw materials, materials, tools and instruments in stock, sent for processing, and already purchased but being transported en route;
• Costs of unfinished services.

Question 3

What is Net realizable value?

Answer 3

the estimated SP of inventories in a normal production and business period minus (-) the estimated cost for completing the products and the estimated cost needed for their consumption.

Question 4

What is current price?

Answer 4

a sum of money payable for the purchase of a similar kind of inventory on the date the accounting balance sheet is made.