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?AS 2 – NRV (double entry)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › ?AS 2 – NRV (double entry)

  • This topic has 1 reply, 2 voices, and was last updated 5 years ago by John Moffat.
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  • February 4, 2020 at 7:59 pm #560701
    yuska
    Member
    • Topics: 15
    • Replies: 11
    • ☆

    Hi dear tutors,

    ?AS 2 demand that we value the inventroy less NRV and cost.

    Example: The company have goods in the amount of 200$ (cost) on 31.12.2019
    . But its sale price is 205$. and it need that 10$ repair expenses for sale.

    We must valued inventory 195$ (NRV).
    My question is that how we account this expense. How would be the double entry.on 31.12.2019?

    DR – expense (or COGS) —- CR – inventory –10$ ???
    DR – expense (or COGS) —– CR inventory allowance 10$ ???

    If the company repairs the good for 10$ on 28.02.2020. how we must treat this operation.
    DR – repair expense — CR – cash —- 10$ ???

    Does not it couse DOUBLE EFFECT?

    February 5, 2020 at 7:51 am #560736
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54680
    • ☆☆☆☆☆

    The inventory is valued, and then it is the correct value that is input into the accounts.

    I explain all the entries and the valuation in my free lectures on inventory.

    The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.

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