IAS 2 - Inventories

IAS 2 relates to all inventories except:

• Construction contracts (IAS 11)

• Financial instruments (IAS 32)

• Biological assets (IAS 41)

• All of the above

What are inventories measured at?

• Fair value

• Lower of cost and net realizable value

• Market value

• Book value

What do inventories cost include?

• Purchase costs and conversion costs

• Purchase costs, net of trade volume rebates, conversion costs, other costs to bring inventory to its present condition and location and selling costs

• Purchase costs, net of trade volume rebates, conversion costs and other costs to bring inventory to its present condition and location

• Purchase costs, conversion costs, other costs to bring inventory to its present condition and location and storage costs

What does NOT need to be disclosed in the financial statements?

• Accounting policies in measuring inventories, including cost formula

• Carrying amount of inventories pledged as security for liabilities

• Amount of inventories recognised as an expense

• Physical count of items in inventory

What is NRV?

• Estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs to make the sale

• Estimated selling price in the ordinary course of business

• Estimated selling price in the ordinary course of business, less the estimated costs of completion

• Estimated selling price in the ordinary course of business, less the estimated costs to make the sale

What is considered inventory?

• Assets held for sale in the ordinary course of business

• Assets held in the process for production for such sale

• Assets in the form of materials or supplies to be consumed in the production process or rendering of services

• All of the above

True or false?

The cost of inventories, other than those dealt with in paragraph 23, shall be assigned by using FIFO or weighted average cost formula for all inventories. An entity shall use the same cost formula for all inventories having a similar nature and use to the entity.

• True

• False