Investor Presentaiton
CAT
THE INSTITUTE OF
CHARTERED ACCOUNTANTS OF SRI LANKA
Measurement
The cost of inventories of items that are not ordinarily
interchangeable and goods or services produced and
segregated for specific projects shall be assigned by
using specific identification of their individual costs.
The cost of inventories, other than those dealt with
above, shall be assigned by using the FIFO or weighted
average cost formula.
An entity shall use the same cost formula for all
inventories having a similar nature and use to the entity.
For inventories with a different nature or use, different
cost formulas may be justified
CAT
THE INSTITUTE OF
CHARTERED ACCOUNTANTS OF SRI LANKA
Measurement
Scenario 1:
Pencil Company Ltd manufactures pencils and
produced the following brushes in the period: three
units at a cost of Rs 20/- each, then five units at Rs
30/- and a final batch of four at Rs 40/- p.u. There are
six units left at balance sheet date. Calculate the cost
of inventory using the following cost formula:
(i) FIFO
(ii) Weighted Average
(iii) LIFO
10/31/2016
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