Why is the lower of cost and net realisable value rule used in the accounting standard? Is

Question:

Why is the lower of cost and net realisable value rule used in the accounting standard? Is it permissible to revalue inventory upwards? If so, when?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Applying International Financial Reporting Standards

ISBN: 978-0730302124

3rd edition

Authors: Keith Alfredson, Ken Leo, Ruth Picker, Paul Pacter, Jennie Radford Victoria Wise

See More Books

Question Posted: Apr 30, 2016 01:01 PM

See More Questions

Why is the lower of cost and net realisable value rule required by accounting standards? Is it permissible to revalue inventories upwards? If so, when? Are there any limits to revaluation?
Beta Ltd commenced business on 1 January and is making up its first years accounts. The company uses standard costs. The company owns a variety of raw materials and components for use in its...
For each of the items in exercise 17.2 state whether they would be measured (a) at fair value under IAS 41 or (b) at the lower of cost and net realisable value under IAS 2: 1. Living pigs 2. Living...
Given the following class, which statement is correct? A. The class does not contain any security issues. B. The class contains exactly one security issue. C. The class contains exactly two security...
The accounting records of Earthtone Ceramics included the following balances at the end of the period: In the past, Earthtones warranty expense has been 8% of sales. During 2012, the business paid...
At the beginning of the year, Peale Company had total assets of $800,000 and total liabilities of $500,000. (a) If total assets increased $150,000 during the year and total liabilities decreased...
Air is stored in a tank where the pressure is $40 \mathrm{psia}$ and the temperature is $500{ }^{\circ} \mathrm{R}$. A converging-diverging nozzle with an exitto-throat area ratio of 2.5 attaches...
During the current year, merchandise is sold for $1,375,000. The cost of the merchandise sold is $880,000. a. What is the amount of the gross profit? b. Compute the gross profit percentage (gross...
Xenor Corporation introduced a bond in 2002 that offered a coupon rate of 8 1/2%, resulting in coupon payments of $8.50. The bond is scheduled to mature in 2032. If the current going interest rate in...
Heat is generated in a 2.5-cm-square copper rod at the rate of 35.3MW/m3. The rod is exposed to a convection environment at 20C, and the heat-transfer coefficient is 4000 W/m2 C. Calculate the...
Compare and contrast the impact on the reported profit and asset value for an accounting period of the first-in, first-out method and the weighted average method.
Arendal Ltd reported in a recent financial statement that approximately $12 million of merchandise was received on consignment. Should the company recognise this amount on its statement of financial...
Write, compile, and test a class that displays at least four lines of your favorite song. Save the class as FavoriteSong.java.
How can you maximize the rank of your rsum when it is going to be evaluated by an ATS?
As you have learned, facilitating a productive meeting requires skills that may be critical to your career success. Your Task. Individually or as a team, describe how you would deal with the...
To fulfill a senior project in your department, you have been asked to submit a letter report to the dean evaluating the feasibility of starting an organization of international students on campus....
What is the difference between the open job market and the hidden job market, and how can candidates find jobs in each?
Name at least six recommendations to ensure that your calls at work are productive.
Summarize that concerns in this category represent situations in which a product or service is not delivered to the organization as expected. Explain that the organizations information system depends...
Danielle has an insurance policy with a premium of $75 per month. In September she is in an accident and receives a bill worth $2990 for the repair of her own property. Her deductible is $250 and her...
When does a corporation establish a valuation allowance? Give an example of positive evidence that might be used to justify that a valuation allowance is not needed.
List the steps necessary to measure and record a corporations current and deferred income taxes.
Describe an operating loss carryback. List the two conceptual questions concerning accounting for a carryback.
What choice is a multiple of 5? a) 93 b) 63 c) 65 d) 84
Determine how many tablets will be needed to give the dosage. Prepare a dosage of 6.4 mg using tablets with a strength of 1.6 mg.
(a). Company Inc., private consumer regulator firm, claims that the standard deviation of the rating of Formula One races in the town main car racing circuit was at least 15.34. (b). An outside...

Why is the lower of cost and net realisable value rule used in the accounting standard? Is

Question:

Step by Step Answer:

Net realisable value is the net amount that an enterprise expects to realise from the sale of invent...View the full answer

Applying International Financial Reporting Standards

Students also viewed these Accounting questions