Valuation of inventories

This query is : Resolved

Premal (Querist)
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25 February 2008 we are importing raw material against advance licence and we do export to clear the the export obligation against advance licence.suppose advance license obligation is not fully met

please even tell me,in case of DEPB

How shuold i value inventories at end of balance sheet date

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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25 February 2008 The matter has been dealt with in detail by the ICA in their Chartered Accountant magazine Dec 2004 and April 2007 issues.

R.V.RAO

R.V.RAO (Expert)
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05 March 2008 Export Benefits

The unutilised Export Benefits under DEPB Scheme/Advance Licence
against export as on the balance sheet date are recognised as income on
accrual basis.
(SOURCE:ANNUAL REPORT OF A MAJOR LISTED COMPANY)
The items of inventory
imported under Duty Entitlement Pass Book (DEPB)/Duty Free
Replenishment Certificate (DFRC)/Advance License (AL)/Special Import
License (SIL) are valued inclusive of the notional duty benefits
availed.
(SOURCE:ANNUAL REPORT OF A MAJOR LISTED COMPANY)
FROM THE ABOVE YOU MAY CONCLUDE THAT WHILE UNREALISED BENEFITS UNDER DEPB ARE ACCOUNTED AS INCOME , THE INVENTIORY ITEMS ARE VALUED INCLUSIVE OF THE NOTIONAL BENEFITS AVAILED.
FOR MORE DETAILS PL. VISIT
WWW.ICAI.ORG
R.V.RAO