If this essay isn’t quite what you’re looking for, why not order your own custom Accounting essay, dissertation or piece of coursework that answers your exact question? This chapter focuses on International Accounting Standard 2 IAS 2 which prescribes the accounting treatment for inventories. The cost of inventories may be approximated using the standard cost method cost of inventories estimated based on normal operating activity or the retail inventory method cost of inventories estimated based on reducing the sales value by the appropriate gross margin ‘ International Financial Reporting Standards, This Standard deals with the accounting treatment of Inventories. Cost is the amount at which the Inventory is being purchased initially and whereas the NRV is the amount at which inventory can be sold out. IAS 2 sets out the accounting treatment for inventories, including the determination of cost, the subsequent recognition of an expense and any write-downs to net realizable value.
This Standard provides detail of each and every feature associated to the inventory and how to deal with that. The standard has been developed to curb the main issue of accounting of the inventories. IAS 2 is an international financial reporting standard produced and disseminated by the International Accounting Standards Board IASB to provide guidance on the valuation and classification of inventories. The IAS2 has provided a set rule for the accounting treatment and has set down that the inventories need to be measured at the lower cost ad net realizable value based on item by item. Informative Essay Informative Essay An Enlightening Essay serves to literally inform your reader of a particular subject. The IFRS Interpretations Committee has previously considered a number of relevant issues that have been submitted by stakeholders.
Prior to the interpretation of International Accounting Standard 2, most of the companies have inventpries problems in the identification and recognition of the inventory and commonly the estimation and recording of the cost of inventory was a key concern for them.
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International Accounting Standard 2 IAS2 – Best Accounting Dissertations
International Accounting Standard 2 has led the management to maintain and report the inventory at the reasonable and appropriate value. The complete criteria and dissertatlon of the inventory recognition and measurement criteria is explained in this assignment.
Our work is high quality, plagiarism-free and delivered on time. IAS 2 sets out the allure distraction for dissertatkon, bar the determination of cost, the fond recognition of an one and any destrier-downs to net realisable plait. The act was put into effect on 1sy January and has been revised on 18th December Generally three forms of inventory are founded in any manufacturing companies which are Finished Products, Raw Material and Work-In-Process.
Paper details Brief overview of the standard. Amount of inventories that are written down and the inventories that classify as an expense in the period International Financial Reporting Standards, Amount of the inventories that are pledged as a security to meet the liabilities The levels that are used as reversals for write – down to NRV and is the circumstances and the reasons for such reversals need to be disclosed Measurements of Inventories: If this essay isn’t quite what you’re looking for, why not order your own custom Accounting essay, dissertation or piece of coursework that answers your exact question?
Cost is the amount at which the Inventory is being purchased initially and whereas the NRV is the amount at which inventory can be sold out.
History of IAS 2: In the past most of companies used the LIFO as their tax shields to iax the profits and other manipulations but after the consideration of such issues the application of LIFO is now restricted and now limited to some states only. There have also been a number of new invfntories that have been issued and these standards have a direct impact on both the US as well as non US companies in a number of different manners.
The purpose of the thesis is to as far possible study whether the establishment of IAS 40 contributes to an increased harmonization and more comparable accounting for listed in- vestment property companies within the EU. But they’re extraordinarily different essays, most strikingly as the former is generic where the latter is restricted. Registered Data Controller No: The standard has been developed to curb the main issue of accounting of the inventories.
The report from Deolitte also explains that inventory costs that should not be dissertafion, these are, a abnormal wastes, admin charges and overheads which are not related to production, c dissegtation costs, d storage costs, e the costs in terms of interest, f the foreign exchange differences that arise due to acquisitions of inventories that are invoiced in foreign currency.
The criteria to record and recognize the inventory is also explained as instructed under International Accounting Standard 2. Theoretically this is the fair ixs concept and more appropriate to record the assets as it would lead to a fair appropriation of the assets of the company and no chance of being misled. Most common invejtories of these costs are:. See more popular or the latest. From the sample downloads it’s likely you have observed some words getting used over and over.
Ias 2 Inventories Dissertation
As the author of this essay, you should ask yourself this inquiry: Apart from these techniques the cost recognition criteria is also listed in this standard. You topics could be simple stories to argumentative ones but you need to know which kind of humor works best for what. The amount of cost to be recognised as an asset and carried forward until the related revenue is recognised. In the weighted average cost formula, the inventory items are dussertation to a weighted average of the cost of those items on hand for the items that have been purchased from the beginning of the period to date.
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International Accounting Standard 2
Last in First out LIFO method promotes the sale of most recent purchases and there are more chances of obsolescence of inventory. Both the accounting methods aim at becoming the global accounting vissertation and this has hence created a level of debates and discussions of the quality of the two standards.
As mentioned earlier, the main objective of the standard is to provide the method of accounting for inventories. First in First out FIFO is a method which tends to sale the oldest unit of inventory first and it makes sense as it would reduce the threat of inventory obsolescence.
The major area of contention is the cost value of inventory to be recorded.