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Hi Mike ..
when is it possible to value inventory at fair value less cost to sell even if it is greater than cost?Inventory like gem stones and marketable commodities like coffee (so I’m led to believe)
I think that, if you calculate “cost of sales” the English way (opening inventory + purchases – closing inventory) and you accept that opening and closing inventories are valued at replacement cost, you’ll realise that any changes in market values are automatically recognised at each year end
OK?
Thanks Mike.
what does you mean by marketable commodities. Co. all inventory are marketable…
What are the exception in IAS 2 specifically for using Replacement cost to value Inventory….
Commodities are things like gem stones, coffee, gold, platinum – products where there is a separate exchange like an international stock exchange – but this time they deal in these products rather than in shares
Surely you’ve heard of a commodities exchange or a precious metals exchange.
OK?
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