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I want to know whether any fines/penalties incurred during import of goods due to any reason can be added to inventory cost or whether they should be fully expensed out as per IAS 2?
Standard states that all costs necessary to bring the inventory in present location and condition can be added. Fines could be added because if we do not pay it, maybe the customs authority would not release the goods to the company. However, still I am not completely sure about that
Thanks in advance
The standard does not specifically say whether to include or exclude them from the cost of inventory, but as you say they are directly attributable so we could look to include them.