AASB 102 provides that not-for-profit entities:
A) Must value their assets at the lower of cost or net realisable value to allow reports to be compared.
B) Should only report inventories at cost for simplicity.
C) Should value their assets at either cost or current replacement cost, whichever is more beneficial.
D) Will record the inventories at the lower of cost or current replacement cost.
E) None of the given answers.

Question

Quizplus · Accepted Answer

AASB 102 requires that inventories for not-for-profit entities be valued at the lower of cost or current replacement cost to ensure that they are not overstated on the financial statements. This approach is consistent with the principle of conservatism, which aims to anticipate losses and not overstate gains.

AASB 102 Provides That Not-For-Profit Entities