Need an argumentative essay on IAS2 Inventories. Needs to be 5 pages. Please no plagiarism.
The main objective of IASB for IAS2 was to reduce the alternatives in the measurement of inventories. The revised IAS2 does not allow the consideration of the exchange differences, arising from the purchase of inventories that are invoiced in the overseas currency, to be treated as a part of inventories purchase cost (Malaysian Accounting Standards Board, n.d.).
As per IAS2 the inventories are measured at cost or realizable value whichever is lower, based on every item. The inventory costs is the sum total of the purchase cost like cost price, import duties, handling as well as transportation costs. after the adjustments of rebates and trade discounts, conversion costs and other costs that are incurred for transporting the inventories to the current location and form. But this excludes the storage costs, costs relating to abnormal wastage. and selling and administration. Inventories costs can be approximated using the standard cost method or retail inventory method.