raksha65 (CA Business) (50 Points)
16 July 2015My client is doing jobwork stiching of garments
He recieves material from the exporter & sometimes purchases as per specifications & then finishes the stiching work & all other work ,like attaching tags & all ,packs them & sends to the principal exporter
He recieves job work charges for the same
My query is he required to maintain inventory as per AS 2 in his books of accounts
Ankiit Gupta
(Audit Article)
(28 Points)
Replied 30 July 2015
As per Clear interpretation of AS-2 (Valuation of Inventories), there is no refference of Raw material which has been received by Job worker from the Principal owner; clearly all kind of inventory has been included in the defination.
Hence, your Client should Disclose the Inventory in books with proper disclosure.
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