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Hello,
When an auditor review inventory on a line-by-line basis, does that mean every inventory items are reviewed?
Example:
“Testing should be undertaken to confirm cost and NRV of the Luge products in inventory and that on a line-by-line basis the goods are valued correctly.” (BPP revision kit answers)
Much appreciated!
Welcome to my forum!
A co has 500 products …
A0001 unit cost $10 …. NRV $12
A0002 unit cost $11 …. NRV $11
A0003 unit cost $9 … NRV $8
etc
etc
All products – cost $11,100 … NRV … $12,300A0003 has be be written down to the lower of cost and NRV – i.e. $8
You can’t just look at total cost and total NRV for all inventory – the loss on A0003 (for example) cannot be offset by the future profit expected on A0001.
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