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John Moffat.
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madni141
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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?
John Moffat
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Revenue 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.
madni141
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