m
 




Presented By:
Ikjot Dhawan
Roll No: 10HM11
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p Determination of value at which inventories are

carried in Balance Sheet,
p Ascertainment of cost,
p Situation in which carrying cost of inventories is
written below cost.
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p held for sale in ordinary course of business,
p in the process of production for such sale, or
p in the form of material or supplies to be
consumed in the production process or in the
rendering of services.
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[
 ?

Inventories should be valued at lower of J
 and

  
 .

Net realization value = Estimated selling price Ȃ Estimated

cost necessary to make sale.
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[
 ?
3hese include all cost of purchase, cost of conversion
and other cost incurred in bringing the inventories to
their present location and condition.

But | 
 include:
i) abnormal amount,
ii) storage cost unless necessary in the production,
iii) administrative overhead,
iv) selling and distribution cost.
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It consist of the purchase price including duties
and taxes, freight inwards and other expenditure
directly attributable to the acquisition.

J



 ?

It include cost directly related to unit of
production i.e. direct wages, variable overhead,
allocable fixed overhead.
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p Accounting policy adopted in measuring

including cost formula used,
p 3otal carrying cost of inventories and its
classification.
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