The Company is having huge amount of Stores and Spares which is account for as inventories as per Ind AS 2. The Ind AS states that "Stores and spares are inventories being in the form of materials or supplies to be consumed in the production process or in the rendering of services." The stores and spares are measured at weighted average cost and is utilized in the production process, drilling activities and pipeline services. The finished product is sold at above cost and therefore not measured at NRV. In such situation whether there is any requirement to calculate NRV for the stores and spares?
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Stores and Spares
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Measuring Net Realisable Value (NRV) of Inventory. Net realisable value is the estimated selling price in the ordinary course of business less: the estimated costs of completion; and. the estimated costs necessary to make the sale.
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