Inventory

Inventory comprises assets held for sale, being produced for sale, or materials and supplies consumed in production or services. Begin with the costs of purchase and conversion that bring goods to their present location and condition. Compare each relevant item's cost with its estimated net realisable value, and recognise a write-down where NRV is lower. The eventual sale transfers its carrying amount to expense. Separate raw materials, work in progress and finished goods when assessing the relevant inventory balances.

Also called: Stock, Inventories