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Ias 2 prescribes the accounting treatment for inventories.
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What is the purpose of IAS 2 in accounting?
The objective of IAS 2 is to prescribe the accounting treatment for inventories. It provides guidance for determining the cost of inventories and for subsequently recognising an expense, including any write-down to net realisable value. It also provides guidance on the cost formulas that are used to assign costs to inventories.
What is the purpose of International Accounting Standard 2?
International Accounting Standard 2 has led the management to maintain and report the inventory at the reasonable and appropriate value. International Accounting Standard 2 defines the items of Inventory along with the methods to record the inventory.
What was the objective of sic-1 in IAS 2?
SIC-1 was superseded by and incorporated into IAS 2 (Revised 2003). The objective of IAS 2 is to prescribe the accounting treatment for inventories.
How are inventories measured in the IAS Standard?
The standard requires inventories to be measured at the lower of cost and net realisable value (NRV) and outlines acceptable methods of determining cost, including specific identification (in some cases), first-in first-out (FIFO) and weighted average cost.
Last Update: Oct 2021
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