Valuation of inventory
This query is : Resolved
Nandini Rao
(Querist)
22 May 2013
Dear Sir/Madam,
If a trust receives donation to purchase books & say Rs.50/- is the donation amount for 1 book and the trust spends Rs.100/- for each book, then while valuing inventory of books, what should be the value of each book?
Should it be Rs.100/- per book or Rs.50/- per book?
Kindly elucidate with reference to AS-2.
Thanking you in advance.
If a trust receives donation to purchase books & say Rs.50/- is the donation amount for 1 book and the trust spends Rs.100/- for each book, then while valuing inventory of books, what should be the value of each book?
Should it be Rs.100/- per book or Rs.50/- per book?
Kindly elucidate with reference to AS-2.
Thanking you in advance.
CA.Tarun Maheshwari
(Expert)
23 May 2013
I think stock value should remain a the market price or cost whichever is less (in this case : Rs 100/-). It should not have any connection with donation amount recieved, because the trust is still speding the balance amount from its own sources.
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