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Forensic Accounting

Treatment for stock value where NRV of raw material is lower than cost but no effect on profit.

the company has raw material whose NRV has gone below its but the company's profitibilty has had no effect.

asked Jun 8, 2014 in IAS 2 - Inventories by anonymous

1 Answer

0 votes
If the NRV has gone below the cost, then the company should write down its inventory to NRV level and book the difference between cost and NRV amount as an expense. The company is also required to disclose the fact that it has written down its inventory value in notes to accounts.
answered Apr 1 by ayush9001 Level 1 Member (1,750 points)