Dear Chartered Accountants,
Query 1: what is mean by net realisable value give some examples?
Query 2: why inventory are valued at lower of cost what is the reason while making preparing financial statement???
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AS 2 VALUATION OF INVENTORIES AS
Replies (1)
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NRV is the expected net cash inflow from selling an asset after deducting completion and selling costs.
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Valuation at lower of cost or NRV is a conservative approach to ensure assets are not overstated on the balance sheet and that potential future losses are recognized in the current period.
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