IAS 2 Inventories

Balance sheet

Current Assets

Inventories

Raw Material
WIP
Finished Goods inv.

B/S

Merc. inv. 100

-40
60
 1/1/2021
10,000 3/7, n/30

1/1/2021
Merchandise inventory
Accounts Payable

if we pay within 7 days

1/7/2021
Accounts Payable
Cash

if we don't pay within 7 days

1/31/2021
Accounts payable
Interest expense
Cash

FAIR VALUE Market price

NET REALISABLE VALUE Estimated market price

(-) Estimated cost of completion
(-) Estimated selling costs

2 Cost Net realisable value IAS 2-

100 125
100 60

B/S
Merc. inv. 10,000
-3500
Merc. İnv, net 6500

FORD

purch 6 3)
purchase 8 Cost
14 2 7

sales revenue
(-) COGS
Inv 8 Gross Margin
 1) Service Companies
2) Merchandising Companies
3) Manufacturing Companies

Income statement
Sales
(-) COGS
Gross Margin

1 Cost interest
VALUE AT THE LOWER OF COST OR NET REALIZABLE VA
2 Cost NRV
100 125 NET REALIZABLE VALUE
100 60

I/S

Loss
 maximum days for payment 30 days

if you pay in 7 days you will get 3% discount

9700
9700

9700
9700 Merc. inv.

9700
300
10,000

Calculation of NRV
1 2
100 200
-20 0
-5 -50
NRV 75 150

Cost NRV lower

Cost
10,000

I/S

Sales
 (-) Cost of sales

Loss -3500
Gross Margin xxx

VALUE AT THE LOWER OF COST OR NET REALIZ

Valuation methods:
weighted average method
First in First out (FIFO)
Last in first out (LIFO)

les revenue 9
(-) 6
ross Margin 3
 Migros
mpanies Ford Honda

ST OR NET REALIZABLE VALUE

-40
B/S I/S

9700

Interest expense

NRV
6500

3500 loss
ER OF COST OR NET REALIZABLE VALUE
300