Inventory valuation NRV

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Rajeev Sharma (Querist)
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03 July 2010 As per AS2, while considering NRV, cost necessary to make the sale have to considred. Please give some examples in this regard.?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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03 July 2010 If you are giving commssion to sales agent, consignment agent for sale, that commission is called cost to make the sale

Rajeev Sharma

Rajeev Sharma (Querist)
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03 July 2010 There are monthly volume schems given to customers whereby they are entilted to rebate on the basis of slabs acheived. This is settled by credit note. Hence the customer gives net money.This is a consitent practise. Will this should be considered for NRV?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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03 July 2010 yes.it is the cost to make the sales, it will be considered

Rajeev Sharma

Rajeev Sharma (Querist)
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03 July 2010 Can't it be argued that these are my selling costs and need not be considered for testing NRV under AS 2

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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04 July 2010 As per as AS-2 concern it is clear the NRV means the sales less the necessary cost of realise that sale

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