The financial statements shall disclose:

(a)
the accounting policies adopted in measuring inventories, including
is the price thatt would be the cost formula used;
(b)
received to sell an asset or paid FAIR VALUE the total carrying amount of inventories and the carrying amount in
to transfer a liability in an orderly classifications appropriate to the entity;
(c)
transaction between market
the carrying amount of inventories carried at fair value less costs to
participants at the measurement sell;
Does not apply to producers of
date (d)
agricultural and forest the amount of inventories recognised as an expense during the
PAS 2 helps business manage and Applies to all inventories
products, agricultural produce period;
report their inventory accurately. It except financial instruments
after harvest, and minerals (e)
prescribes accounting treatment for and biological assets related
and mineral products and the amount of any write-down of inventories recognised as an
inventories, determine inventory to agricultural activity and
commodity broker-traders who expense in the period in accordance with paragraph 34;
is the estimated selling price in the costs, and assign costs to agricultural produce at the (f)
measure their inventories at
point of harvest
ordinary course of inventories.
fair value less costs to sell.
the amount of any reversal of any write-down that is recognised as a
reduction in the amount of inventories recognised as expense in the
business less the estimated costs of NET period in accordance with paragraph 34;
completion and the estimated costs REALISABLE (g)
necessary to make the sale and the the circumstances or events that led to the reversal of a write-down
VALUE of inventories in accordance with paragraph 34; and
net amount that an entity expects to (h)
realise from the sale of inventory in OBJECTIVE AND DISCLOSURE the carrying amount of inventories pledged as security for
liabilities.
the ordinary course of business
SCOPE
NRV = Estimated selling price in the ordinary course of
business
Less: Estimated cost of completion
Less: Estimated costs necessary to make the sale
are assets:
PAS 2: Write-down to NRV should be recognised as an expense.
(a) held for sale in the ordinary INVENTORIES DEFINITIONS WRITE-DOWN TO Any reversal should be recognised in the income

course of business;
Inventories NRV statement.
Recognition occurs in the period in which the reversal takes place.
(b) in the process of production
for such sale; or shall be measured at the lower of cost
(c) and net realisable value. When inventories are sold, the carrying amount of those inventories shall
be recognised as an expense in the period in which the related revenue is
in the form of materials or MEASUREMENT recognised. The amount of any write-down of inventories to net realisable
supplies to be consumed in the RECOGNITION AS value and all losses of inventories shall be recognised as an expense in the
(COST OF INVENTORIES) period the write-down or loss occurs. The amount of any reversal of any write-
production process or in the EXPENSE
of inventories, arising from an increase in net realisable value,
rendering of services. shall be recognised as a reduction in the amount of inventories recognised
as an expense in the period in which the reversal occurs.

COST MEASUREMENT COST OF AGRICULTURAL

COST OF PURCHASE COST OF CONVERSION OTHER COSTS COST FORMULAS
TECHNIQUES COST EXCLUSIONS PRODUCE HRVSTD FRM.
BIO ASSETS

The costs of purchase of inventories The costs of conversion of Other costs are included in the cost of
Techniques, such as the sandard cost method
comprise the purchase price, import inventories include costs directly inventories only to the extent that they (a)Specific Identification Method -keeping abnormal amounts of wasted In accordance with IAS 41 Agriculture
or the retail method, may be used for
duties and other taxes (other than those related to the are incurred in bringing the inventories track of every individual item in your inventory materials, labour or other production inventories comprising agricultural
convenience if the results approximate
subsequently recoverable by the units of production, such as direct to their present location and (b)First-In -- First Out (FIFO) - items cost. Standard costs take into account normal costs; storage costs, unless those produce that an entity has harvested from
entity from the taxing authorities), and labour. They also include a condition. For example, it may be purchased or produced first are sold first levels of materials and supplies, labour, costs are necessary in the production its biological assets are measured
(c)Weighted Average -calculates the cost of on initial recognition at their fair value
transport, handling and other costs systematic appropriate to include non-production efficiency and capacity utilisation. The retail process before a further production
less costs to sell at the point of
directly attributable to the acquisition of allocation of fixed and variable overheads or the costs of designing inventory based on the average cost of method is often used in the retail industry for stage; administrative overheads that
harvest. This is the cost of the inventories
production overheads that are products for specific customers in the similar items at the beginning of the period measuringinventory of large numbers of do not contribute to bringing
finished goods, materials and at that date for application of this
and during it. rapidly changing items with similar margins for inventories to their present location
services. Trade discounts, rebates and incurred in cost of inventories. Standard.
which it is impracticable to use other costing
other similar items are deducted in converting materials into finished and condition; and selling costs
(IAS 23 Borrowing Costs identifies limited methods.
determining the costs of purchase. goods. circumstances where borrowing costs
are included in the cost of inventories.)