Commission paid for purchase of goods is added when calculating valuation of closing stock or treated as direct expenses. Pls. provide any judgement referance related to this.
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Valuation of inventories
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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 | ||
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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 |
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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.
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