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IAS 2 Inventories

Inventories prescribes the accounting treatment for inventories; it provides guidance on the determination of cost and its subsequent recognition as an expense, including any write-down to net realisable value.

Revised December 2003. Effective 1 January 2005.

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Synopsis

  • IAS 2 requires that inventories are measured at the lower of cost and net realisable value. ‘Cost’ includes all costs of bringing the item to its current location and condition. 
  • The cost of inventories should be assigned using either the first-in first-out or weighted average cost method.

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The following interpretation refers to IAS 2

This page was last updated 4 February 2022.