Valuation of inventories

All direct expenses are added to cost of Inventory as per AS-2.If commission is related to purchasesin bringing the inventory to present location and condition  then add to cost of inventory

Originally posted by : sivaram
	All direct expenses are added to cost of Inventory as per AS-2.If commission is related to purchasesin bringing the inventory to present location and condition  then add to cost of inventory

Agree with the above..if the comm is not atributable directly for bringing the inv to current location and stage,then it charged as indirect expense to p&l

AGREE WITH SHIVRAM

(As per Accounting Standard-2) All Cost incurred to bring the inventory to its present location and condition is to be included in the cost of inventory. So, Commission paid for purchase of goods is included in the cost of inventory as per AS-2

direct expenses related to purchase of inventory should be included in costing of inventory and gross profit should be find out on that basis.