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12 kwi 2024 · Under IAS 2, inventories are measured at the lower of cost and net realisable value (IAS 2.9). The cost of inventories includes all costs of purchase, conversion, and other costs incurred in bringing the inventories to their present location and condition. Let’s explore this further.
Techniques for the measurement of the cost of inventories, such as the standard cost method or the retail method, may be used for convenience if the results approximate cost. Standard costs take into account normal levels of materials and supplies, labour, efficiency and capacity utilisation.
16 kwi 2023 · Inventory revaluation is adjusting inventory costs to reflect changes in the recorded cost. These changes may be due to exchange rate movements, disrupted supply chains, obsolescence, damage, or spoilage. Revaluing inventory can have a significant impact on a company’s financial statements.
3 sie 2021 · Significant negative changes (have occurred or are expected) in the technological, market, economic or legal environment. Market interest rates or other market rates of return on investments have increased (which will increase the discount rate used in calculating an asset’s VIU).
IAS 36 Impairment of Assets seeks to ensure that an entity's assets are not carried at more than their recoverable amount (i.e. the higher of fair value less costs of disposal and value in use).
31 maj 2024 · The primary basis of accounting for inventories is cost, provided cost is not higher than the net amount realizable from the subsequent sale of the inventories (see IV 1.3.2). Cost may be determined using a variety of cost flow assumptions, such as first-in, first-out (FIFO), average cost, or last-in, first-out (LIFO).
16 wrz 2024 · Inventory turnover is calculated by dividing a company's cost of sales, or cost of goods sold (COGS), by the average value of its inventory over two recent consecutive periods.
