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Dear John Moffat,
Could you please help me answer this question: “How many methods in valuing inventories?”
I see that according to IAS02, there are 4 methods: FIFO, LIFO, AVCO, Specific Identification.
However, when doing some other questions, I also see “standard costing method”. I do some research about this method, according to F2 text book (BPP), they said that it also had the use: to value inventories.Come back to my question, can you tell me how many methods when valuing inventories.
Thank you so much for your time.
IAS 2 applied to financial accounts and allows unit cost, FIFO, AVCO, and selling price less a profit margin (although the last one is only if for some reasons the other three methods are not possible). IAS 2 does not allow LIFO.
All these methods are explained in full in our free lectures.IAS2 does not apply to Paper F2 because F2 is management accounting and in management accounts inventory can be valued any way the business wants to. Again this is explained in our Paper F2 free lectures.
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