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16 October 2011 Does the cost of depriciation should be included while calculating the cost of inventories ?

16 October 2011 Depreciation on inventory??

16 October 2011 which cost of depriciation ??




17 October 2011 As per Accounting standard-2, inventory should be valued lower of cost and net realizable value.

cost of inventory means here cost of purchase, "cost of conversion" and other costs.

Depreciation obviously comes under cost of conversion, hence should be included in cost of inventory.

19 October 2011 Suppose , coal is transported to its store room through tracks and wagons , then should depreciation of the tracks and wagons for the period for which coal is transpored ,be included in calculating cost of coal..?If yes , then why ...?



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