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As-2 valuation of inventory

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05 November 2011 suppose a co. is dealing in manufacturing of fertillisers and for that a "pipe" of special specification is required which gets totally used in the manufacturing of that fertilisers, so the co. imported those pipes suppose at a price of rs. 10 lacs as those pipes of same specific technical specification were not available in india at that time,but after certain time those pipe of same technical were available in india at a price of rs. 7 lacs..now the co. wants to value those pipes..as these pipes are treated as inventory..now my query is that at which price these pipes will be valued at the year end?..
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CA Anshu Agarwal

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CA Anshu Agarwal (Expert)
05 November 2011 if such 'pipe' is used in the manufacturing process, it shall not be treated as inventory unless it is consumable item or any raw material for finished goods. It shall be treated as fixed assets, hence AS - 2 shall not be applicable.
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