Ch 2 · AS-2 Inventory Valuation

5 concept points · 3 formulas · 4 exam-critical points.

📘 Core concepts

• 1Inventory valued at lower of Cost or Net Realisable Value (NRV).
• 2Cost includes purchase, conversion, other costs to bring to present location & condition.
• 3Cost formulae: FIFO, Weighted Average. LIFO prohibited under AS-2 / Ind AS 2.
• 4NRV = estimated selling price − costs of completion − costs to sell.
• 5Abnormal waste, storage costs, admin overheads are excluded from cost.