Valuation of Inventories
This query is : Resolved
Ravindra Gupta
(Querist)
23 July 2010
We have purchased raw material @ 2000/ Qtl.
Now, at the end of accounting period the NRV of Final product is 1900/-.
what should be the treatment of valuation of closing stock of Raw Material as the cost of final product is lower than the cost of raw material.
Whether the valuation of balance stock of raw material should be at realisable value or the cost of purchase or some other treatment and how and why.
Thanks
Now, at the end of accounting period the NRV of Final product is 1900/-.
what should be the treatment of valuation of closing stock of Raw Material as the cost of final product is lower than the cost of raw material.
Whether the valuation of balance stock of raw material should be at realisable value or the cost of purchase or some other treatment and how and why.
Thanks
CA Sanat Pyne
(Expert)
23 July 2010
AS 2 clarifies that Raw material should be valued at cost.But if it is converted into final product then it should valued cost or makket price whichever is lower.
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Ravindra Gupta
(Querist)
24 July 2010
We have purchased raw material @ 2000/ Qtl.
Now, at the end of accounting period the NRV of Final product is 1900/-.
what should be the treatment of valuation of closing stock of Raw Material as the cost of final product is lower than the cost of raw material.
Whether the valuation of balance stock of raw material should be at realisable value or the cost of purchase or some other treatment and how and why.
Thanks
Now, at the end of accounting period the NRV of Final product is 1900/-.
what should be the treatment of valuation of closing stock of Raw Material as the cost of final product is lower than the cost of raw material.
Whether the valuation of balance stock of raw material should be at realisable value or the cost of purchase or some other treatment and how and why.
Thanks
CA Sanat Pyne
(Expert)
24 July 2010
please clrealy mention whatever you purchase is raw material or finished goods.
If it is used as raw material then it is always be valued at cost . unless it be rejected.
If it is used as raw material then it is always be valued at cost . unless it be rejected.
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