Page 18 - PowerPoint Presentation
P. 18
INVENTORIES
Other Issues
• Imported inventory (IAS 21)
• Measured at spot exchange rate on date risks and rewards are
obtained
• Inventory is not adjusted for subsequent exchange rate movements
• Service providers
• Cost of service for which revenue is yet to be recognised,
recognised as inventory
• Cost will comprise mostly labour e.g. design costs
• Joint and by‐products
• One process and multiple products
• Allocate costs on a rational and consistent basis
• By‐products
• Usually immaterial ‐ measured at NRV & deducted from cost of
main product
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