Valuation of closing stock

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This query is : Resolved

sachin nagori (Querist)

19 August 2011 SIR, NOW DAYS DEPARTMENT IN THE CASES OF GOLD AND SILVER MERCHANT ARE NOT ACCEPTING AVERAGE COST METHOD PRINCIPLE FOLLOWED BY THE CLIENTS DUE TO INCREASE IN RATES THEY WANT TO VALUE THE SAME AT PRICE AS ON 31ST OF MARCH WHICH IS NOT RESONABLE CAN ANY ONE GUIDE ME WHICH IS THE PROPER METHOD AND IF SUCH METHOD FOLLOWED IS IT WRONG AND IN WHICH MANNER AS THE CLOSING WEIGHT IS VALUED AT WEIGHTED COST METHOD , THIS IS GOING TO BE BIG PROBLEM TO ALL JEWELLERS DUE TO RISE IN PRICES

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

19 August 2011 It can be valued as per LIFO method. but as per AS-2 is not recommending the LIFO. but valuation is based on the accounting policy as per company. the same will be mentioned in Notes to accounts

CA Ravi Sisodia

CA Ravi Sisodia (Expert)

19 August 2011 Accounting policy of the company should be according to Accounting Standards. so LIFO method can't use.

CA Hardik Bunha

CA Hardik Bunha (Expert)

19 August 2011 as per AS 2
cost price or market prise on the last day of closing books of accounts. WHICHEVER IS LOWER will be taken into consideration for closing stock. I HOPE U UNDERSTAND.....

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