Query on AS-2

Dear Students/Experts/Members

I have a querry on AS-2

Standard Prescribes Specific Identification method in case of Specific Projects and if the materials are not interchangeable and if interchangeable FIFO or Weighted Average Cost Formula.

The Standard also relaxes for Standard Cost  and Retail method for Retail Business

Now  Presume a Person Carries on Sand Business Purchases are made in Heaps and issues can be defintely made only from the Last Purchased Lot First as it is impracticable to issue Sand from First Purchased Lot

In ths Situation pricing of Issues on LIFO Basis would be appropriate but  our Indian Standard Does not permit LIFO like US GAAP

Can I have  some opinion on this issue by learned members

 

 

Replies (1)

Dear Sir,

As you said it is impractible to issue sand from 1st purchased lot because it mixes with the last one, but it is also impracticable to issue sand from last purchased Lot. Both can be possible if you hold the severaly lots separately, in this case you may record the txn. on fifo basis. but better option would be Weighted avg. cost because it is quite difficult to hold the several lots separately.

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