Valuation of Raw Materials
This query is : Resolved
Sammbru Sa
(Querist)
15 December 2022
While considering the value of Raw materials for valuation in Both Balance sheet and Profit and Loss a/c, should we considered absorbing the Freight inward in the av rate of inventory.
This freight inward has been already shown in Direct expenses as freight charges should it be considered in av rate of inventory also?
This doubt arose because conceptually thinking even though we need all cost of procuring the asset in the cost of goods sold, it's effect has been already happened in the corresponding period in which the raw material is bought right?
This freight inward has been already shown in Direct expenses as freight charges should it be considered in av rate of inventory also?
This doubt arose because conceptually thinking even though we need all cost of procuring the asset in the cost of goods sold, it's effect has been already happened in the corresponding period in which the raw material is bought right?
CA R SEETHARAMAN
(Expert)
15 December 2022
Not to be included in inventory as it's already charged to direct expenses.
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