Valuation of inventory/stock under IAS 2

Under IAS 2 inventory should be valued at the lower of Cost & Net Realisable value 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. NRV …

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Update: IAS 2 Inventories multiple choice quiz

If you’re studying IAS 2 Inventories, why not test your knowledge with our multiple choice quiz? By practicing questions you’ll improve your study and recall, ideal for people who learn best by ‘doing’ rather than just reading.

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What you need to know about Inventories for IAS 2

What are Inventories?

IAS 2 Inventories is the accounting standard governing the recognition, measurement and disclosures for inventories.


Inventories are assets:

  • held for sale in the normal course of business. (e.g. a retailer will hold stock, a manufacturer will hold finished goods)
  • in the process of production for sale (e.g. work in progress)
  • materials or supplies to be used in the production process (e.g. raw materials)

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