acconting standard

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jatin arora (Querist)
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16 June 2008 if stock had sent for further processing how you value the stock as on balance sheet date? accounting standard 2 doesnt say something about this. Is it necessary that on balance sheet date stock should be luying in business premises.(please explain with an example)

CA. Yayati Tyagi

CA. Yayati Tyagi (Expert)
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16 June 2008 if stock is in the process as on b.s date, it should be valued as Work In Process. u need to calculate processing cost and while doing it, take care of status of completion of process.

if process is not 100% complete, u may assume it 50% or more/less complete. calculate labour/power/other cost for that process and divide that by total qty processed and get per unit cost. add this cost to cost of goods, it is cost of WIP.

it does not make any difference if stock is lying in or out of factory premises. valuation method will be same if u have the ownership.

CA. Yayati Tyagi

CA. Yayati Tyagi (Expert)
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16 June 2008 if u get this process done by third party, u can take charges payable to that party as processing cost.

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