• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

New! Lectures for ACCA AAA September 2022 Exams are now available >>

New! BPP Books for ACCA September 2022 Exams are now available, get your discount code >>

Inventory

Forums › ACCA Forums › ACCA FR Financial Reporting Forums › Inventory

  • This topic has 2 replies, 3 voices, and was last updated 9 months ago by barbjohn.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • August 19, 2021 at 5:27 pm #632234
    canvn2000
    • Topics: 1
    • Replies: 0
    • ☆

    I have a question about inventory.
    Company A entered a contract to supply good B to C with price 10
    In the year, A purchased material with price 5. At the year end, A estimate that the cost to produced is 11.
    So NRV = 10 – 11 = -1.
    My question is How do we account for the material with price 5 ?

    P/s: I think we have to use both IAS 37 for onerous contract and IAS 2

    September 1, 2021 at 10:13 am #633780
    motlax98
    • Topics: 1
    • Replies: 2
    • ☆

    cost to produce plus the materials purchased =5+11=16
    cost includes all things than require the goods to be sold this includes the material costs

    September 18, 2021 at 10:42 am #635947
    barbjohn
    • Topics: 0
    • Replies: 33
    • ☆

    If we’re talking about the value of the raw material inventory, then the closing inventory valuation is at $5 unless even that purchase price has now been overtaken by a supplier’s price reduction so the retail value of that raw material inventory would be at the new reduced price

    If the inventory is finished / processed goods, then cost of those processed goods is $5 + $11 = $16 but realisable value is only $10 per the contract so the value of the closing inventory of processed goods will be $10

    It’s possible that your figure of $11 includes the purchase cost of $5 in which case the value of the closing inventory of finished goods would be the lower of nrv of $10 and costs incurred in bringing the inventory to its current location and condition ie $5 + $6 = $11

    So, again the value of the closing inventory of finished goods would be $10

  • Author
    Posts
Viewing 3 posts - 1 through 3 (of 3 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate

If you have benefited from OpenTuition please donate.

Specially for OpenTuition students

20% off BPP Books

Get BPP Discount Code

Latest comments

  • praveenmasih on PPE – revaluation upwards – ACCA Financial Reporting (FR)
  • Ken Garrett on The nature and structure of organisations – ACCA Paper BT
  • Ken Garrett on The nature and structure of organisations – ACCA Paper BT
  • nojwwnolife on The nature and structure of organisations – ACCA Paper BT
  • John Moffat on Discounted Cash Flow Further Aspects, Lease versus Buy – ACCA Financial Management (FM)

Copyright © 2022 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in


We use cookies to show you relevant advertising, find out more: Privacy Policy · Cookie Policy