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Inventory acquisition cost
a company purchase inventory of rs 1 cr and the supplier delivered the good of rs 1 cr 50 thousand ( 50 thousand as a promotional gift) so at which value/cost it is recorded in books of account of company
Replies (6)
1.5 in the inventory
1 in cos
0.5 as gain
You have 1 in trading cause it sets off with purchases
Not getting you sir
If that particular 50 k is not payable by the company, at that time you should book the value of 1 Cr but at the same time you should punch the whole inventories ( promotional gifts too ) in your books .
In pl
Dr. Inventory 1
Cr. Cost of sales 1
Again
Dr. Inventory 0.5
Cr. Gain/promotions 0.5
But why we are booking 50k as gain in books instead we record the inventory at 1 crore which reduces the cost per unit
Inventory is valued at lower of cost or NRV but not purely on purchases cost. As, indas, IFRS 2 doesn't address free stock. But revenue recognition does as part of variable consideration eg. Buy one product and demand one free. If it's a b2b scenario, accounting must be done right?
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