[Tram]

This is a little bit complicated. Please see if my understanding is correct
1) expense has been charged in the year of recognising lower nrv by higher cost of goods sold, as prudent concept said: expense is recorded as soon as it is probably happened
2) next year, lower cost of goods sold is net of with actual expense. Hence, nothing happened

Thanks a lot

[Tram]

There should be somewhere talking abt it, i guess.

[Tram]

Sorry for bother you again, does IAS 2 say anything about it? I read but could not absorb it.

[Tram]

Dear John,

Understand it. But someone told me that:
– If the inventory follows perpetual way, when we purchase new inventory, we dr inventory
– If the inventory follows periodic way, when we purchase new inventory, we dr purchase

is that correct?

[Author]

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