Page 229 - F1 Integrated Workbook STUDENT 2018

IAS 2, 8, 10, 34 and IFRS 8

1.1 Calculation of cost

Inventory should be valued at cost – either the actual cost of an item (unit cost), or, if
there are a large number of items in inventory which makes this impractical, a
reasonable approximation to actual cost should be used. The most common
approximations are:

If actual cost is variable use:

 first-in, first-out (FIFO) – Value at most recent prices

 average cost (AVCO) – Value at average price

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