Carrying cost of inventory
Atharv Sankliya (1306 Points)
05 December 2022
how carrying cost of inventory is recorded in books of accounts
Atharv Sankliya (1306 Points)
05 December 2022
Uttam Gagan18
(Accounts & Finance Professional)
(19 Points)
Replied 05 December 2022
Just add that cost to stock .
Depends on software. If you are using Tally ,then use option Additional Cost.
Or , you can book that cost under Direct expenses , and at the time of making Balance sheet you can add that cost to Stock value.
sabyasachi mukherjee
(26185 Points)
Replied 06 December 2022
Yasaswi Gomes new
(Finance )
(4487 Points)
Replied 06 December 2022
Try the FIFO or weighted average to get the cost of remainng inventory.
Atharv Sankliya
(1306 Points)
Replied 06 December 2022
Yasaswi Gomes new
(Finance )
(4487 Points)
Replied 06 December 2022
Any other costs to bring the asset to the sale can be considered. Including stistorage if it is necessary. Its a complex scenarion, then we have to analyse what expenses we incur and as 2 standard tells us what costs to be deleted.
Fifo and weighted gives us the cost of remaining inventory after production, storage and handling (storage is written off usually not unless if they are necessary for the next stage of production. So ten years is a necessary stage of production or not, you have to define it.) If it is me, ill expense off stotage costs because its not the next phase of production. Your management must decide it.
If you can understand that its either cost or nrv the finished goods are measured at. Only the closing stock is measured and not the goods sold already. So what number you get after using the formula, is the ending balance.
Yasaswi Gomes new
(Finance )
(4487 Points)
Replied 06 December 2022
I have attached a standard problem that every CA has. By this, you will understand the whole scenario with FIFO calculations as well. You know as, indas and ifrs are just the same
CAclubindia
