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Is Absorption costing a STATUTORY requirement?

Hharsh10y ago
Hello just getting a little bogged down in trying to figure out whether or not Absorption costing is a STATUTORY requirement? any advice would be great thanks
John MoffatJohn MoffatTutor10y ago#1
There are no statutory requirements at all for Management Accounting - management accounting is to help management and they can do whatever they want. For financial accounts, inventory must be valued at the full cost of production including the absorption of fixed costs of production. This is a requirement of International Accounting Standard number 2 (which is not a statutory requirement).
Hharsh10y ago#2
Thank you John- appreciate the clarification
John MoffatJohn MoffatTutor10y ago#3
You are welcome :-)
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