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Stephen Widberg.
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sarah762
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M/J 2016
Dear tutor
1. Why did the question ask us to apply IFRS 13 in measuring the FV of the inventory? I thought we do not apply IFRS 13 for inventory?
2. The answer uses the concept of principal and most advantageous market but not the highest and best use. I don’t understand the reason for doing so. I thought we should use the highest and best use because it is a non financial asset?
Hope you can explain. Thank you in advance.
sarah762
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Can you explain to me please? I am having trouble in applying the concept
Stephen Widberg
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IFRS 13 applies whenever FV is being considered. So it would be relevant in determining the realisable value of inventory.
Guidance in IFRS 13 says that for items sold in a ‘market’ – i.e. inventory, use:
1. Principal market, and if there is no principal market, use:
2. Market that would give most advantageous price.Deloitte has a good summary if you need more:
sarah762
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