Investor Presentaiton
CAT
THE INSTITUTE OF
CHARTERED ACCOUNTANTS OF SRI LANKA
Measurement
Inventories shall be measured at lower of cost and NRV
Cost of inventories :
(i) Purchase costs
Purchase price
Import duties and other taxes (other than those
subsequently recoverable from taxing authorities)
Transport, handling & other directly attributable costs
Deductions: Trade discounts, rebates & other similar items
(ii) Costs of conversion
➤ Costs directly related to units of production. E.g. Direct labor,
production overheads
(iii) Other costs
Other costs directly attributable to bringing inventories to
present location & condition
CAT
THE INSTITUTE OF
CHARTERED ACCOUNTANTS OF SRI LANKA
Measurement
Costs of conversion
Variable production overheads
Fixed production overheads
Basis
Actual use of production facilities
Normal capacity of production
facilities
Costs excluded from the cost of inventories :
(i)
abnormal amounts of wasted materials, labor or other
production costs;
(ii) storage costs, unless those costs are necessary in the
production process before a further production stage;
(iii) administrative overheads that do not contribute to bringing
inventories to their present location and condition
(iv) selling costs
10/31/2016
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