The following information relates to Moore Company's inventory:Cost of inventory = $460Selling price of inventory = $500Normal profit margin = 10% of selling priceCurrent replacement cost = $370Cost of completion and disposal = $50Under IFRS, which of the following would be the correct measurement value for the inventory?
A) $460
B) $370
C) $500
D) $450

Question

Quizplus · Accepted Answer

Under IFRS, inventory is measured at the lower of cost and net realizable value (NRV). The cost of inventory is $460. The NRV is calculated as the selling price ($500) minus the cost of completion and disposal ($50), which equals $450. Since $450 (NRV) is lower than the cost ($460), the inventory should be measured at $450.

The Following Information Relates to Moore Company's Inventory:Cost of Inventory