Excise duty on closing stock valuation
This query is : Resolved
CA Ajay Wadhwani
(Querist)
24 May 2012
WHAT IS THE LOGIC BEHIND ADDING EXCISE DUTY ON CLOSING STOCK AS PER AS2 INVENTORY VALUATION , EXCISE DUTY IS NOT OUR COST SO IT SHOULD ALSO NOT BE INCLUDED IN STOCK VALUATION?
shashikumar
(Expert)
24 May 2012
Dear Ajay,
The logic is, Closing stock to be values at cost and only profit element to be removed and excise duty form part of cost, as it is charged on manufacture.
If we apply your logic that is excise duty is not our cost, you can say all cost incurred are not our cost since will be recovered from customer
Kindly revert to me for any clarification.
Regards,
CA.K.SHASHIKUMAR.K
The logic is, Closing stock to be values at cost and only profit element to be removed and excise duty form part of cost, as it is charged on manufacture.
If we apply your logic that is excise duty is not our cost, you can say all cost incurred are not our cost since will be recovered from customer
Kindly revert to me for any clarification.
Regards,
CA.K.SHASHIKUMAR.K
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CA Ajay Wadhwani
(Querist)
24 May 2012
i agree sir but if we consider excise duty in closing stock than we are not following matching concept , opening stock without excise duty and closing stock including excise duty . and as far as exps are concern their is no concept of credit as in the case of excise, so why we should include excise duty in cost of inventory?
24 May 2012
Refer ASI 14 on excise duty inclusion in CLosing Stock valuation.
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