- This topic has 1 reply, 2 voices, and was last updated 7 years ago by
.
- Posts
Hello Mike
What type of inventories could service companies hold?
For example: Would razor, scissors, shaving cream, comb, etc etc. be counted as an inventory for a barber business? If not, then under what category would it come under?
Similarly, for construction businesses, all the items used in their businesses such as cement, scaffolding materials, bricks, painting materials, etc be counted as inventory?
If you say its counted as inventory, my doubt would be that IAS 2 states that inventory is that where the purpose is to held those items for ‘RE-SALE’ in day-to-day business. But such items I mentioned earlier are not exactly held for resale by those companies. They are using it to perform their activities.
So will it come under inventory or not?
Thank you in advance for the reply.
“Would razor, scissors, shaving cream, comb, etc etc. be counted as an inventory for a barber business? If not, then under what category would it come under?”
Only if the barber offers them for sale
But the individual values of these items is likely immaterial and would in all probability be expensed as and when they are purchased
“for construction businesses, all the items used in their businesses such as cement, scaffolding materials, bricks, painting materials, etc be counted as inventory?”
Most certainly, yes
“But such items I mentioned earlier are not exactly held for resale by those companies.”
Yes, they are held for resale! It’s a part of the costs that make up the invoice value for the construction work carried out
OK?
- The topic ‘IAS 2 – Inventories’ is closed to new replies.