IAS2 or IAS10

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  • Avatar of hassanCh
    hassanCh
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    i’m little bit confused with the following treatment … whether its IAS2 or IAS10 or both .. can any1 solve this?? supposing total inventory in SFP is $4 million …

    Some inventory items included in the draft Statement of Financial Position at a cost of $500,000 were sold just after the Statement of Financial Position date for $400,000, with selling expenses of $40,000


    Avatar of Vipin
    Vipin
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    it is both IAS2 and IAS 10.
    updated value of inventory=4000k-500k+400k-40k=3860k


    Avatar of MikeLittle
    MikeLittle
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    yes, the items included at cost of $500 only have a resale value ( net ) of $360 ie $400 – $40. So, instead of including them at $500, they should be included at the lower of cast and net realisable value. In this case, the total inventory value will fall by $140 ie the difference between $500 and $360 and appear in the cost of sale calculation and the SoFP at a total value of $3,860,000

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