Valuation of closing stock
This query is : Resolved
Jay Chakraborty
(Querist)
31 January 2012
A company got mining right from Government. Its activity involves excavation of ore, concentration of metal from excavated ore, and then smelting and refining of concentrated metal. But the company neither values closing stock of ore nor does it values closing stock of concentrated metal. At the most, it shows WIP for concentrated metal. Is this type of valuation acceptable?
31 January 2012
Dear Jay,
all the stocks shall be valued in accordance with AS-2.
In your case,
1. RM-Ore,
2. WIP - Excavation Process, Concentrating process, Smelting process and refining process
3. FG - Concentrated Metal
all the stocks shall be valued in accordance with AS-2.
In your case,
1. RM-Ore,
2. WIP - Excavation Process, Concentrating process, Smelting process and refining process
3. FG - Concentrated Metal
Jay Chakraborty
(Querist)
01 February 2012
Thank you,Sir. What I forgot to mention that the company is charging all its ore extraction expenses, concentrating expenses to P/L A/c and citing such charging off to revenue as an argument for not calculating closing stock. If possible, kindly explain whether such treatment is correct.
01 February 2012
No such treatment is wrong.
As per AS-2, Inventory shall be valued at Cost or NRV.
Cost means Cost incurred to bring the inventory to its present location and Condition.
Extraction and Concentration expenses bring the ore to its new condtion and location. i.e Concentrating process/extraction process.
Therefore, such expenses incurred shall be included to arrive the cost
As per AS-2, Inventory shall be valued at Cost or NRV.
Cost means Cost incurred to bring the inventory to its present location and Condition.
Extraction and Concentration expenses bring the ore to its new condtion and location. i.e Concentrating process/extraction process.
Therefore, such expenses incurred shall be included to arrive the cost
01 February 2012
In my earlier reply, the following para shall be suffixed with the Second Para.
"Which ever is lower"
"Which ever is lower"
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Query on effect of registration of property
- GST on reimbursement of expenses
- Visiting card purchase
- Due date for filing return for the partner in partnership subjected to Tax Audit
- Goodwill transfer of deceased father’s firm – ICAI applying a 27.04.2026 cut-off to the 3 year limit
- Whether output tax is taken credit by purchaser
- Additional trade name
- Number of years as per AS amortisation of Goodwill
- Wrong CMPo8 file
- Equity Share Sale and Purchase
- Foriegn assets disclosure
- Classification of income of P Ltd company as business or profession
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Need to correct "Whether it is last installment " response in Form 26 QB
- " Income from House Property " in joint names of co-owners
- REGARDING TDS RETURN OF FORM 27Q
- Notice under e-Verification Scheme
- GST demand notice for ITC reversal against exempted supply.
- RCM ON SECURITY CHARGES FROM INDIVIDUALS
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
