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Extract of International Accounting standard 2
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PRESENTED BY; SHUAIB ADEADEBAYO ACA,CFE,ACCA…….
IAS 2 States that inventory must be valued at lower of cost and net realizable value
DOES NOT APPLY TO THE FOLLOWING
ELEMENTS OF INVENTORIES ARE:
COST OF INVENTORIES
COSTS OF CONVERSION
ISSUES TO REMEMBER
N
Opening Inventory X Add: Purchases X Add: Carriage Inwards
X Less: Returns Outwards (X) Total goods Available X Less: Closing Inventory (X)COST OF GOODS SOLD X
COST OF GOODS SOLD FORMULA