As 2

in my opionion it is not included in Inventories because its not a saleable item

AS-2 will not apply to lables As-2 defines inventories as under: Inventories are assets:

(a) held for sale in the ordinary course of business;

(b) in the process of production for such sale; or

(c) in the form of materials or supplies to be consumed in the production process or in the rendering of services.

The lables are not saleable in itself it has to go with the product (unless the business is to sale the lable itself). Lables are not a part of production process and it is not consumed in the production process.

The lables are not fitting in definition of inventory hence AS-2 is not applicable

regards