Revenue expenditure(e.g: inventory) is written as a current asset on SOFP if it carries over to the next period.My question is that as the current asset (inventory) now has a life of more than one accounting period why it is not considered a non-current asset in SOFP?
Ask the Tutor ACCA FA
Revenue expenditure
8y ago#1Revenue expenditure appears on the SOPL and not on the SOFP!
Inventory is not revenue expenditure - purchases are revenue expenditure, inventory is an asset.
Inventory is not expected to be held for more than a year - that would be ridiculous, they will be expecting to sell it soon. It is always a current asset.
Have you watched my free lectures? The lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.
Sign into reply to this topic.