AS 2 states that "Inventories should be valued at the lower of cost and net realisable value" but why is it not 'lower of cost or net realisable value'.
Is there any specification for this?
AS 2 states that "Inventories should be valued at the lower of cost and net realisable value" but why is it not 'lower of cost or net realisable value'.
Is there any specification for this?
From my point of view
there are various methods for valuation of inventory , so it is specified by AS to go for two of them...
Value them either at cost or at NRV whichever is lower...to bring comparability & prudency.
Correct me if i'm wrong !
you are just getting confused in language. "lower of" is a comparative degree which compares two items jointed by conjunction "and". "or" is not applied when "lower of" used
Here lower of cost and NRV means "whichever is lower both of them"
You can't say lower of cost or NRV because "or" separates them
Ya the point is clear now...Thanks..
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