The following information pertains to inventory held by a company on December 31, 2011. $$\begin{array} { l r }
\text { Historical cost } & \$ 30,000 \
\text { Replacement cost } & \$ 20,000 \
\text { Net realizable value } & \$ 27,000 \
\text { Normal profit margin } & 20 \%
\end{array}$$
-What amount of inventory should be reported under IFRS?

Question

The following information pertains to inventory held by a company on December 31, 2011. $$\begin{array} { l r } 
\text { Historical cost } & \$ 30,000 \
\text { Replacement cost } & \$ 20,000 \
\text { Net realizable value } & \$ 27,000 \
\text { Normal profit margin } & 20 \%
\end{array}$$
-What amount of inventory should be reported under IFRS?

Quizplus · Accepted Answer

Under IFRS, inventory is reported at the lower of cost or net realizable value. The historical cost is $30,000, and the net realizable value is $27,000. Therefore, the inventory should be reported at $27,000.

The Following Information Pertains to Inventory Held by a Company