IAS 2 - Inventories

Question 1

the principle of inventory valuation

Answer 1

Inventories should be valued at the lower of cost and net realisable value

Question 2

cost

Answer 2

-comprises all costs of purchase, conversion and finishing to bring items to their current location and condition (eg import duties and other taxes, transport and handling costs directly attributable to the purchase)

Question 3

net realisable value

Answer 3

the estimated selling price in the ordinary course of business, less the estimated costs required to complete and sell the item