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As-2

AS 591 views 2 replies

Hello ,

          Can some one clarify me in detail about How NRV for WIP is computed ? I also have thought, that Not all WIP is marketable in that stage of completion, so there is no question of selling price, then How to compute it? or should we deduct % of completion from selling price in order to get NRV for WIP? 

 

 

Replies (2)

cost incurred uptothe stageof completion shall be considered as value of wip.

however it is very well clear that such wip after being made to finished goods will be sold at below the cost incurred for production than only value them at market value.

otherwise for wip consider cost incurred as value of wip.

  • Net realisable value is
    • the estimated selling price in the ordinary course of business less
    • the estimated costs of completion and
    • the estimated costs necessary to make the sale.

 As 2 defines NRV as above. So estimated selling price is not required at stage of completion, it is required to ne estimated now the expected selling price on completion of that inventory for calculating NRV.

Please check Pg 1.30 chart & example

https://220.227.161.86/19666ipcc_acc_vol1_chapter-1.pdf

 

@ JAINENDRA JAIN

Since WIP. = Inventory= it is also required to be valued at lower of cost & NRV. I could Not see anywhere in standard stating WIP to be valued at Cost . Can you provide any standard or GN or other material that I can refer?

 


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