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heloo sir !!
i wanted to ask that why impairment is not charged on current assets ? any particular reason !
waiting for ur reply !It is, in a way!
Current assets are shown at a value that represents the lower of two alternative values (cost and net realisable value)
So, if nrv is below cost, that’s the value at which it shall be shown in the statement of financial position.
For inventory, simply the inclusion of a reduced value in cost of sales has the affect of impairing any inventory
For the other main current asset, we create a Provision for non-collectables and that serves as an account to record impairments of accounts receivable
Ok?
i didnot get your point of other main current assets !!
what will be the double entry of provision for non collectables ?
why they are called non collectables ? please clearify me ! i will be thank ful sir 🙁
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