Closing stock valuation should include proportionate inward transport cost. Allocate freight expenses based on purchase value or quantity to comply with AS 2, ensuring inventory is valued at cost incurred to bring goods to their present location.
21 May 2026
DEAR SIR WHAT EVER CLOSING STOCK REMAINS BALANCE AS ON 31ST MARCH THEREUPON HOW TO ADD INWARD TRANSPORT IS THE MAIN ISSUE PLEASE GUIDE ME AND OBLIGE
21 May 2026
To include inward transport in the valuation of closing stock as of March 31st, apply a proportionate allocation method. Calculate the ratio of total inward transport expenses to total purchases (either by item quantity or total value) for the period, and multiply this ratio by the closing stock balance. This allocation ensures compliance with Accounting Standard 2 (AS 2), which mandates that all costs incurred in bringing inventory to its present location must be included in its valuation.
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