Indian Accounting Standard 2

Indian Accounting Standard (Ind AS) 2

Inventories Contents

OBJECTIVE SCOPE DEFINITIONS MEASUREMENT OF INVENTORIES Cost of inventories Costs of purchase Costs of conversion Other costs Cost of inventories of a service provider Cost of agricultural produce harvested from biological assets Techniques for the measurement of cost Cost formulas Net realisable value RECOGNITION AS AN EXPENSE DISCLOSURE APPENDICES A. References to matters contained in other Indian Accounting Standards 1. Comparison with IAS 2, Inventories Paragraphs 1 2-5 6-8 9-33 10-22 11 12-14 15-18 19 20 21-22 23-27 28-33 34-35 36-39

Indian Accounting Standard (Ind AS) 2 Inventories

(This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold italic type indicate the main principles.)

Objective

1. The objective of this Standard is to prescribe the accounting treatment for inventories. A primary issue in accounting for inventories is the amount of cost to be recognised as an asset and carried forward until the related revenues are recognised. This Standard deals with the determination of cost and its subsequent recognition as an expense, including any write-down to net realisable value. It also deals with the cost formulas that are used to assign costs to inventories.

Scope

2. This Standard applies to all inventories, except: (a) work in progress arising under construction contracts, including directly related service contracts (see Ind AS 11, Construction Contracts; financial instruments (see Ind AS 39 , Financial Instruments: Recognition and Measurement and Ind AS 32, Financial Instruments: Presentation); and biological assets (i.e., living animals or plants) related to agricultural activity and agricultural produce at the point of harvest (See Ind AS 41, Agriculture1)

(b)

(c)

3.

This Standard does not apply to the measurement of inventories held by: (a) producers of agricultural and forest products,...