What is inventory according to IAS 2?

What is inventory according to IAS 2?

IAS 2 defines inventories as assets which are: held for sale in the ordinary course of business, in the process of production for such sale, or. in the form of materials or supplies to be consumed in the production or rendering of services.

What should be disclosed in IAS 2?

The required disclosures under IAS 2 are: 1- Accounting policies, 2- Carrying amount, generally classified as merchandise, supplies, materials, work in progress, and finished goods, 3- Carrying amount of any inventories carried at fair value less costs to sell, 4- Amount of any write-down of inventories that are …

What is the proper valuation of inventories under IAS 2?

Cost = all expenditure incurred in bringing the product to its present location and condition. This includes costs such as transport, import duties, production overheads etc. It excludes things like selling costs, abnormal waste, general expenses, storage costs.

What is inventories according to PAS 2?

Inventories include assets held for sale in the ordinary course of business (finished goods), assets in the production process for sale in the ordinary course of business (work in process), and materials and supplies that are consumed in production (raw materials). [ PAS 2]

What are the 4 types of inventory?

There are four main types of inventory: raw materials/components, WIP, finished goods and MRO.

What type of assets are classified as inventories IAS 2?

Inventories – assets that are: – held for sale in the ordinary course of business; – in the process of production for such sale; or – in the form of materials or supplies to be consumed in the production process or in the rendering of services. estimated costs necessary to make the sale.

What are the content in IAS 2?

IAS 2 provides guidance for determining the cost of inventories and the subsequent recognition of the cost as an expense, including any write-down to net realisable value. It also provides guidance on the cost formulas that are used to assign costs to inventories.

What are accounted under IAS 2?

IAS 2 covers accounting for inventories. It applies to all inventories except financial instruments (covered by IAS 32 and IFRS 9) and biological assets that are in the scope of IAS 41.

What are the disclosure requirements for inventory?

A manufacturer should disclose the following categories of inventory: raw materials, work-in-process, finished goods, manufacturing supplies, and packaging supplies. When some of these amounts are not significant, some categories may be combined, such as raw materials and supplies, or raw materials and work-in-process.