- 5 Marks
Question
List the costs which should be included when measuring the cost of inventories and identify any cost which should be excluded.
Answer
Costs to include:
- Cost of purchase
- Cost of conversion
- Other costs incurred in bringing the inventories to their present location and condition
Costs to exclude:
- Costs of abnormal waste
- Storage costs (unless necessary before a further production stage)
- Administrative overheads that do not contribute to bringing inventories to their present location or condition (5 Marks)
- Tags: Accounting Standards, Exclusions, IAS 2, Inventories
- Level: Level 1
- Topic: Accounting for Inventories (IAS 2)
- Series: MAY 2014
- Uploader: Theophilus