Raw material: Raw materials are to be valued at cost only. Exception: if the finished goods in which the raw material is used is likely to be sold below the cost, then the raw material should be valued at NRV.
could you please explain me elaborately and with example please
2 Replies
prasad Nilugal
( GST Practitioner & Accounts )
(14903 Points)
Replied 13 August 2022
Material and other supplies held for use in the production are all valued at Cost, if the finished product in which they are used are expected to be sold at or above the Cost, However, when there has been a decline in the price of material and it is estimated that Cost of Finished product will exceed net realisable Value, then row material are valued at NRV .In such case , the replacement cost of the material may be the best available of their NRV.
MPR Sanjay Kumar
(3145 Points)
Replied 23 August 2022
Replacement cost means here how to use ?? plse explain me
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