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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 4
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