- 8 Marks
FR – L2 – Q17 – Inventories
Explain IAS 2 requirements for inventory measurement and state disclosure requirements for Kintampo Limited.
Question
MEASUREMENT OF INVENTORIES
IAS 2 inventories prescribes the accounting treatment for inventories under the historical cost system.
Required
(a) Explain briefly how IAS 2 requires the following to be dealt with.
(i) Fixed production overheads.
(ii) The determination of the lower of cost and net realisable value.
(iii) The identification of costs when there are large numbers of items which are ordinarily interchangeable.
(b) State four disclosure requirements of IAS 2 in respect of inventories.
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