Valuation of waste / scrap in closing stock.

16 April 2019
In our industry we are producing fertilizers and during the process a waste of carbon slurry generated. This waste has some market value but not having any cost of production.

Kindly advice whether the same is to be shown in closing stock of the industry while working out the profitability at the end of financial year. It has small and fluctuating market value only.


Shashikant Varshney (Expert)
19 April 2019
You are following the mercantile method, so you need to show the closing stock of the Scrap. It is just like as a byproduct. You need to value it n a reasonable cost by crediting the manufacturing cost.

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