Basic query in accounting
This query is : Resolved
pavankumar
(Querist)
29 September 2013
"Net Realisable Value=Estimated Selling price-Estimated costs of completion-Expenditure requried to carryout sale."
In the above context whether below statement is correct?
"Above NRV formula can be specifically used for Semi finished goods,However for Finished Goods NRV will exclude Estimated costs of completion because there cannot be estimated costs of completion for finished goods.
I will be very much thankful to you.
In the above context whether below statement is correct?
"Above NRV formula can be specifically used for Semi finished goods,However for Finished Goods NRV will exclude Estimated costs of completion because there cannot be estimated costs of completion for finished goods.
I will be very much thankful to you.
CMA Ramesh Krishnan
(Expert)
29 September 2013
As per the AS -2 the NRV definition Net realisable value is the estimated selling price in the ordinary
course of business less the estimated costs of completion and the
estimated costs necessary to make the sale.
the above formula which you have given also refer the same, for semi finished goods can have estimated cost of completion & selling cost but completely finished goods may have only estimated cost of selling.
so above statement is correct
course of business less the estimated costs of completion and the
estimated costs necessary to make the sale.
the above formula which you have given also refer the same, for semi finished goods can have estimated cost of completion & selling cost but completely finished goods may have only estimated cost of selling.
so above statement is correct
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