1. Initial Inventory Recognition:
   According to IAS 2: Inventories, inventory is measured at the lower of cost or net realisable value (NRV). The initial cost of the inventory was:
   $€7.2million÷0.12=GH¢60million$
2. Revaluation of Inventory:
   By 31 October 2022, the NRV of the inventory was revised down to €7.0 million, and the exchange rate changed to GH¢1 = €0.14. The NRV in cedis is:
   $€7.0million÷0.14=GH¢50million$
   Since the NRV is lower than the cost, Sadio must write down the inventory to GH¢50 million. The write-down of GH¢10 million (GH¢60 million – GH¢50 million) should be recognised as an expense in the profit or loss statement.
3. Foreign Currency Translation:
   According to IAS 21: The Effects of Changes in Foreign Exchange Rates, the purchase is initially recorded at the transaction date exchange rate (GH¢60 million), but as the value of the non-monetary item (inventory) changes, it is revalued based on the latest exchange rate.
4. Deferred Tax Impact:
   As per IAS 12: Income Taxes, a deferred tax asset must be recognised for the deductible temporary difference created by the inventory write-down. The applicable tax rate at the balance sheet date was 20%, so the deferred tax asset is:
   $GH¢10million\times 20$
   The change in the tax rate to 25%, announced after the balance sheet date, is a non-adjusting event, so the deferred tax should remain at 20%.

Marks Allocation:

• Inventory write-down and revaluation: 2 marks
• Foreign currency translation: 2 marks
• Deferred tax recognition: 1 mark
  (Total: 5 marks)