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(PDF) Quick Reference on Ind AS 2

Download Quick Reference on Ind AS 2 Inventories

Ind AS 2 prescribes the accounting treatment for inventories, such as, determination of cost and its subsequent recognition as expense, including any write-downs of inventories to net realisable value and reversal of write-downs.

Excluded Inventories (Not dealt under Ind 2)

  • Financial instruments ( covered by Ind AS 32 and Ind AS 109)
  • Biological assets related to agricultural activity
  • Agricultural produce at the point of harvest

An exception from the measurement principle in Ind AS 2 for inventories held by: 

  • 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.
  • commodity broker-traders who measure their inventories at fair value less costs to sell.

Changes in the fair value less costs to sell, or in the net realisable value, of such inventories are recognised in profit or loss in the period of the change .

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