Menu Close

Download Ind AS 2, Inventories

Download Complete Text of Indian Accounting Standard (Ind AS) 2, Inventories

Download PDF

Ind AS 2: Inventories

Objective

The objective of this Standard is to prescribe the accounting treatment for inventories. A primary issue in accounting for inventories is the amount of cost to be recognised as an asset and carried forward until the related revenues are recognised. This Standard deals with the determination of cost and its subsequent recognition 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.

Scope

This Standard applies to all inventories, except:

(a) financial instruments (Ind AS 32, Financial Instruments: Presentation and Ind AS 109, Financial Instruments); and

(b) biological assets (ie living animals or plants) related to agricultural activity and agricultural produce at the point of harvest (See Ind AS 41, Agriculture).

This Standard does not apply to the measurement of inventories held by:

(a) producers of agricultural and forest products, agricultural produce after harvest, and minerals and mineral products, to the extent that they are measured at net realisable value in accordance with well-established practices in those industries. When such inventories are measured at net realisable value, changes in that value are recognised in profit or loss in the period of the change.

(b) commodity broker-traders who measure their inventories at fair value less costs to sell. When such inventories are measured at fair value less costs to sell, changes in fair value less costs to sell are recognised in profit or loss in the period of the change.

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge