The value of inventory reported in the financial statements under AASB 102 may be reported at an amount lower than its original cost.

Question

Quizplus · Accepted Answer

AASB 102 allows for inventory to be reported at the lower of cost and net realisable value, which means that if the net realisable value (i.e. the estimated selling price less estimated costs of completion and selling) of the inventory is less than its original cost, the inventory may be reported at the lower amount. This ensures that inventory is not reported at a value higher than its recoverable amount.

The Value of Inventory Reported in the Financial Statements Under