diff b/w conservatism and prudence

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A J Sankar (Querist)
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10 November 2008 Or they mutually agree or disagree?

Suppose when we are valuing inventory we take cost or NRV which ever is less.

But is it prudent to show like that as it is not showing the real values of stock.

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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10 November 2008 Why are you saying it is not showing the real value?

A J Sankar

A J Sankar (Querist)
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10 November 2008 If we follow the rule Cost or Nrv w.e.l and if the NRV is less we show stcok at NRV eventhough it is lesser than the cost(and ofcourse it may further sell at a higher price)Is it correct to show like that ie at nrv(which is less than cost).
Because the statement should reflect correct current financial position

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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10 November 2008 But that is real, meaning that is all you will get at that point!!

A J Sankar

A J Sankar (Querist)
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11 November 2008 sorry sir, please tell me what u suppose to say.
Whether my view is correct or not.
Will the statement show real value if valued as above(ie nrv

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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11 November 2008 The NRV is the value you can realise actually, then what is the use of cost there?

A J Sankar

A J Sankar (Querist)
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11 November 2008 ok sir Thank Q

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