IFRS – IAS No.2
Accounting for Inventories
Definition of Inventory
• Items that are:
– held for sale in the ordinary course of business; – In the process of production for such sale; – In the form of materials or supplies to be consumed in the production process or in the rendering of services
Recognition
• Ownership of inventory
– Good in transit
• Fob shipping point • Fob destination
– Consignment sales
Measurement
• Lifo is not allowed, but:
– – – – Specific identification FIFO Weigthed average Net realizable value on individual item basis
• No difference in cost of inventory
Case
Disclosure
• Accounting policy • Method to measure inventory • Amounts & types of inventories