Ind AS 2: Inventories#
Scope#
Applies to inventories held:
- For sale in ordinary course of business
- In the process of production for such sale
- In the form of materials to be consumed
Excludes:#
- Work in progress under construction contracts (Ind AS 11)
- Financial instruments (Ind AS 109)
- Biological assets (Ind AS 17/Aggregates with Ind AS 117)
Measurement#
Inventories measured at lower of:
- Cost
- Net Realizable Value (NRV)
Cost includes:#
- Purchase cost
- Conversion cost
- Other costs to bring to present location
Cost Formulas#
| Method | Description |
|---|---|
| Specific identification | For identifiable items |
| FIFO | First in, first out |
| Weighted average | Weighted average cost |
NRV Calculation#
NRV = Estimated selling price - Estimated costs to complete - Estimated selling costs
Write-down#
- Recognized as expense in period of write-down
- Reversal recognized in period of reversal
Disclosure Requirements#
- Accounting policies for inventories
- Carrying amount by classification
- Amount of inventories written down
- Reversal of write-down
- Carrying amount at fair value less costs to sell