Valuation Of Inventory

Dear All,

Whether Cash Discount given at the time of payment of the Bill can be deducted for the valuation of Stock

Replies (16)

NO                                        

no cash discont not deduct the valuation of stok only trade discount can be deduct

YES WHY NOT GOING BY AS 2 IT SAYS VALUATION MUST BE DONE ON ACTUAL COST OR NET REALIZABLE VALUE BASIS SO BECAUSE OF CASH DISCOUNT IF COST OF STOCK IS GOING DOWN DEFIANTLY COST MUST BE REDUCED

no cash discount can not be deducted for the valuation of Stock.

no...because you can not predict whether it will be a cash sales or credit sales...if its probable that its going to be cash sales only, then you should deduct it

Originally posted by : Sundip Dalmia

no...because you can not predict whether it will be a cash sales or credit sales...if its probable that its going to be cash sales only, then you should deduct it
Originally posted by : A.Jayasri




Originally posted by : Sundip Dalmia






no...because you can not predict whether it will be a cash sales or credit sales...if its probable that its going to be cash sales only, then you should deduct it



 

Kindly refer to Accounting Standard 2 Valuation of Inventories

no cash discount should not be deduted

for costing purposes cash discount is to be ignored. bcoz we r not sure whether we will make payment in the stipulated time to enjoy cash disc.

however any other form of discount is to be deducted.

Cash discount is not a trade discount so can't be deducted for valuation of inventory as per AS-2

cash discount is incentive given by supplier for timely payment. hence cash discount is not to be deducted while valuation of inventory

no it cant be Deducted as it is not related to the Cost but it is a kind of financial Income.

Cash discount should not be deducted from invoice value. Because it does not effect the market value of inventory.

Hi all

Thanks for ur replies.

Also while gng thru AS 2 i have come to the following.

This is for the people who have said that Cash discount is an allowable expenses.

"Trade discount is reduced from cost of purchase but cash discount will not be reduced from cost of purchase. As per para 5.7 the Guidance Note on Tax Audit, it has been clarified that cash discount is financial cost & cannot reduced from Turnover, on the principle that interest paid to supplier cannot form part of cost of purchase. "

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