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ACCOUNTING TREATMENT AS 2

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MPR Sanjay Kumar

3145 Points Posted on 11 August 2022

As per accounting standard to valuation of inventories or valued at lower of cost and net realiseble value...

1 .)how to value of inventory raw material

2.) how to value of inventory work in progress

3.) how to value of inventory finished goods

could you please explain me the as 2 valuation of inventory

plse guide me

Replies (2)

Quick Summary

This discussion explains the accounting treatment for inventory valuation under AS 2, focusing on valuing items at the lower of cost and net realisable value. It provides guidance on valuing raw materials based on purchase invoices, work-in-progress using the Cost of Goods Manufactured (COGM) ledger, and finished goods derived from COGM. Closing inventory will encompass all three categories.

Yasaswi Gomes new

Finance

4592 Points Posted on 23 August 2022

1. Value of raw material as per purchased invoices because all valuation is done on rupee basis and not on quantity.

2. WIP - follow the COGM ledger for a better understanding of how opening wip + overheads + finished stock + waste is allocated. You can get that info from Corporate finance institute on Google.

3. From COGM only you can find the cost of finished goods.

When it comes to reporting, closing inventory includes, all three costs.