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

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

Learning Objectives
  • Discover concepts and rules for inventory under IAS 2.
  • Explore inventory costing methods under IAS 2.
  • Identify the accounting treatment of ownership of goods.
  • Recognize how IFRS provides accounting requirements for fair value of inventory under IAS 2.
  • Explore how IAS 2 handles net realizable value.
  • Explore other alternative valuation methods under IAS 2.
  • Discover the disclosure requirements of IAS 2.
  • Identify the financial statement presentation required by IAS 2.
Last updated/reviewed: March 27, 2024
2 Reviews (29 ratings)


Anonymous Author
The audio content of this course was essentially a reading of the content on the slide. I would have been improved by providing examples or other illustrations to demonstrate and tie the accounting concepts to real life situations.

Anonymous Author
was first time to review IFRS2. it was good experience overall and easy to understand.

Course Complexity: Intermediate

No advanced preparation or prerequisites are required for this course.

Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Instructor for this course
Course Syllabus
Introduction And Overview
  Introduction to IFRS for Inventories11:38
  Objective and Application1:55
  Cost of Inventory11:45
  Measurement 14:15
  Other Costs3:02
  Service Provider Costs3:21
  Techniques for Cost Measurement4:38
  Cost Formulas5:36
  Net Realizable Value11:31
  Recognition As an Expense1:49
  Disclosures 5:00
Continuous Play
  IFRS for Inventories1:22:08
Supporting Material
  Slides: IAS 2: IFRS for InventoriesPDF
  IAS 2: IFRS for Inventories Glossary/IndexPDF
Review And Test