Valuation of inventories question

Inventory is valued at cost or market price which ever is lower. In this case the cost price or purchase value is Rs. 100 and the resentely sold price is Rs. 150.

Hence the remaining qty will be valued at Rs. 100.

From my point of view, Market Price will be considered as 90 for closing stock valuation purpose and when we compared with its cost, Market Price will be lower.

So remaining qty should be valued at Rs. 90

as per AS-2, Raw material is valued as follows :

if RM is incorporated in F.G. which is expected to be sold at cost or above  thn valuation should be done at cost only.

if  RM is incorporated in F.G. which is expected to be sold at lower then cost thn valuation is done at cost or current purchase price whichever is lower .

F.G. is valued at cost or N.R.V. whichever is lower .

so the answer is dependent whether u r valuing the f.g. or r.m.

F.G. is valued at cost or N.R.V. whichever is lower .

so the answer is dependent whether u r valuing the f.g. or r.m. 
 

Here, for the calculation of Stock, you must take Purchase Value or Sale Value , whichever is less.

Market value is nothing to do here.

Unit value of Product X is Rs.100/-

Dear Jiju

if you purchased this item for resale purpose without altration the quality and shape, than value of inventory will be at cosr price and if you sale after any change the quality or any way and the market price always lower than cost price, than inventory value will be cost or market price wich is lower.

thanks

Originally posted by : CA Subin VR
	There should not be two market for the same product. If market value is Rs.90 then net realisable value will also be Rs.90/- It should be valued at Rs.90/-

Dear Subin, Suppose there is another market, say a special zone where only these goods are sold at 150.