IAS 2: IFRS for Inventories

IAS 2 has changed how companies account for inventories on their financial statements.

As the largest or second-largest item on the balance sheet, and a significant item on the income
statement (cost of goods sold), accounting for inventory is a high priority.

A primary issue in accounting for inventories is the amount of cost to be recognized as an asset
and carried forward until the related revenues are recognized. Guidance on the determination
of cost and its subsequent recognition as an expense, including any write-down to net
realizable value as on the cost formulas that are used to assign costs to inventories are
provided.

IAS 2 requires the accountant to measure the fair value of inventory by choosing among several
alternative methods. But just exactly how do you do it? This presentation will provide you with
easy-to-follow guidelines that will ensure that you are able to comply with IAS 2.

Course Key Concept:  IFRS, IAS 2, Fair value, Asset revaluation, Revenue recognition