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FV adj of inventory on consolidation

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › FV adj of inventory on consolidation

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  • May 17, 2021 at 9:26 am #620806
    james8500
    Participant
    • Topics: 68
    • Replies: 17
    • ☆☆

    Hi, FV adj to increase inventory on consolidation. I get that net assets are increased by that amount. I dont understand the adjustment in COS.

    Can you please explain why cost of sales are increased when value of inventory is increased on consolidation? And how is this treated when some of the inventory is in stock @ ye?

    thanks

    May 17, 2021 at 8:05 pm #620883
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7172
    • ☆☆☆☆☆

    Hi,

    Where have you seen the CoS figure being increased with a FV adjustment? I don’t recall seeing this being done in any questions and if it were then the increase in inventory value would reduce the CoS figure.

    Thanks

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