Home For AAT student members AQ 2013 AAT Level 3 (Level 6 in Scotland)
Current updates regarding coronavirus (Covid-19) and the precautions AAT are taking will be continually updated on the below page.

Please check this link for the latest updates:
We hope you are all safe and well and if you need us we will be here. 💚

Absoprtion Costing

Hi everyone.

One of the methods of valuing inventory is to use absoprtion costing where all costs are absorped into finished goods and according to most online accounting websites it is in accordance with Gaap and IFRS. But if we absorb the administrative expenses into a finished product then that can't be in line with those two accounting standards. I really can't get my head around the valuation of inventory and its use of full absoprtion costing. I understand its use with finding the full cost of one unit produced but not its involvement in the valuation of inventory for financial statements.

Best Answers


Sign In or Register to comment.