Inventory IAS 2
vlambkin1
Registered Posts: 3 New contributor 🐸
Hi
Can anyone help with calculating inventory under IAS 2?
I've been working on the practice exams on the AAT website and I cannot work out any of the inventory questions!
E.g in Practice exam 3 Question 1.4
A company has 3 different products in it's inventory:
Product Costs incurred to date Estimated Costs of Completion Expected Selling Price
1 £400 £180 £562
2 £572 £210 £798
3 £615 £173 £762
The answer is £1543 but I have no idea why!
I know that under IAS 2 the inventory is valued at the lower of cost and net realisable value but I just cannot get to the figure of £1543!
Any help would be much appreciated.
Thanks :001_smile:
Can anyone help with calculating inventory under IAS 2?
I've been working on the practice exams on the AAT website and I cannot work out any of the inventory questions!
E.g in Practice exam 3 Question 1.4
A company has 3 different products in it's inventory:
Product Costs incurred to date Estimated Costs of Completion Expected Selling Price
1 £400 £180 £562
2 £572 £210 £798
3 £615 £173 £762
The answer is £1543 but I have no idea why!
I know that under IAS 2 the inventory is valued at the lower of cost and net realisable value but I just cannot get to the figure of £1543!
Any help would be much appreciated.
Thanks :001_smile:
0
Comments
-
You have to remove the expected costs of completion from the expected selling price then compare the adjusted selling price to the costs incurred to date.
Lower of
400 or (562 - 180)
572 or (798 - 210)
615 or (762 - 173)
Gives you 382 +572 + 589 = 15430 -
Thank uknitty!
It finally makes sense now!0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 322 NEW! Qualifications 2022
- 159 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 93 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 273 VAT
- 92 Software
- 274 Tax
- 138 Bookkeeping
- 7.2K General accounting discussion
- 201 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership