Page 29 - 5.1 (b) i. Finac1 ITC Summarised Notes

ITC EXAM PREP

Measurement

NRV

• Definition
Estimated selling price
Less estimated costs of completion
Less estimated selling costs
• Not the same as FV less costs to sell
NRV is entity‐specific
• NRV of raw materials is usually replacement cost
If used in the production of finished goods, not written down to NRV if the finished good can be
sold above cost
• Annual NRV assessments required

NRV write down - expense to P/L i.e. included in cost of sales
NRV write down reversal - Reduction of expense in P/L
When evidence of change in circumstances exists

29