Always Accounting standards

This discussion clarifies the valuation of raw materials under Accounting Standard AS 2. It confirms that raw materials should be valued at the lower of their cost or replacement value. Replacement cost is defined as the market price less selling costs, and it's used when the cost of finished goods is expected to exceed their net realisable value. The consensus is that if the replacement cost is lower than the original cost, the lower value should be used for inventory valuation.