2. This technique serves the valuation of closing stock easily. 3. This method practically renders the profit and loss most conservative. 4. It is particularly applicable where a certain quantity of basic materials is needed in process for a long time. 5. All the advantages of FIFO and LIFO method will also be applicable in this method. Disadvantages: 1. Accounting Standard 2 – Valuation of inventories is a measurement standard having far reaching implications on the financial statements. AS 2 is applicable to all enterprises, irrespective of the size and nature of business. Though, by number it is two, the AS 2 (revised) is applicable to all enterprises wef 1-4-99 only. The Thus, excise duty provided on finished goods is included in valuation of stock of finished goods. Valuation of inventory of WIP and final products - As per AS-2, while valuing inventories of WIP and final products, the value of inputs ought to be net of duty on inputs, i.e. the purchase cost is reduced by CENVAT credit, if CENVAT credit is available.

Of which 10% is normal loss in general, there were no sales in that period and closing stock was 80. Calculate the Inventory value: Normal Loss = 100*10% = 10 Cost per item considering normal loss = 100*10/ 90 = RS 11.11 Abnormal Loss is 90-80 (Normal – closing stock) = 10 Cost of abnormal loss = Rs 111.11 Closing stock Value = Rs 888.89. 3. The value of opening stock is added up to the stock consigned in the current period to obtain the total value of stock with the consignee. Methods of Valuation of Stocks When there is opening stock with the consignee, the rate of valuation of stock is to be ascertained based on the method being adopted for stock valuation. IndAS 2 – The objective of this Standard is to prescribe the accounting treatment for inventories.This Standard provides the guidance for determining the cost of inventories and for subsequent recognition as an expense, including any write-down to net realisable value. check more details about Ind AS 2 Vs AS 2 Accounting standard 2 (AS 2): This Standard deals with the determination of value at which inventories are carried in the financial statements, including the ascertainment of cost of inventories and any write-down thereof to net realisable value. Recently we provide Accounting Standard -1, and How Accounting standards are formulated.

Periodic Inventory Method. This method of stock valuation is also known as physical stock taking method or annual stock taking method. Under this system of taking inventories, stock is determined by physical counting at the end of the accounting period i.e. the date of preparation of final accounts.

This accounting standard is formulated for valuation of the inventory with the enterprise in the course of business. It explains about the different methods of accounting the inventory or closing stock. This valuation part of inventory is very important as it affects both revenue of the business and the asset. Gross Profit method is also used to estimate the amount of closing stock. Step 1 – Add the cost of beginning inventory and the cost of purchases we will arrive at the cost of goods available for sale. Step 2 – Multiply (1 – expected gross profit) with sales to arrive at the cost of goods sold. AS 2 valuation of inventory. 09 August 2010 In my company, inventory is valued at cost basis.The net realisable value of inventory does not taken into consideration. But as per AS 2 inventory should be valuated lower of cost and net realisable value. AS – 2; VALUATION OF INVENTORY; Inventories are assets: (a) held for sale in ordinary course of business; (b) in the process of production fro such sale (WIP); (c) in the form of materials or supplies to be consumed in the production process or in the rendering of services. 2. This technique serves the valuation of closing stock easily. 3. This method practically renders the profit and loss most conservative. 4. It is particularly applicable where a certain quantity of basic materials is needed in process for a long time. 5. All the advantages of FIFO and LIFO method will also be applicable in this method. Disadvantages: 1. Accounting Standard 2 – Valuation of inventories is a measurement standard having far reaching implications on the financial statements. AS 2 is applicable to all enterprises, irrespective of the size and nature of business. Though, by number it is two, the AS 2 (revised) is applicable to all enterprises wef 1-4-99 only. The

The Valuation of Inventory AS 2 explains about the different method of valuation of a Closing stock. As per the Accrual Concept Anticipate ever loss but not Profit until it is recognized. So Valuation of Inventory is calculated under the various methods such as LIFO, FIFO, Weighted Average, …etc.

Periodic Inventory Method. This method of stock valuation is also known as physical stock taking method or annual stock taking method. Under this system of taking inventories, stock is determined by physical counting at the end of the accounting period i.e. the date of preparation of final accounts. c. While Ind AS 2 (para 25) provides an option to a company to follow either First-in-First-Out method or weighted average method for determining value of inventory, ICDS II (para 16) restricts the method to the one that would reflect the fairest possible approximation to the cost incurred on the inventory. In the case of conflict between the provisions of Income Tax Act, 1961 (‘the Act)’ and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent”. Scope (Para 1) “This Income Computation and Disclosure Standard shall be applied for valuation of inventories, except:

In the case of conflict between the provisions of Income Tax Act, 1961 (‘the Act)’ and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent”. Scope (Para 1) “This Income Computation and Disclosure Standard shall be applied for valuation of inventories, except:

Gross Profit method is also used to estimate the amount of closing stock. Step 1 – Add the cost of beginning inventory and the cost of purchases we will arrive at the cost of goods available for sale. Step 2 – Multiply (1 – expected gross profit) with sales to arrive at the cost of goods sold. AS 2 valuation of inventory. 09 August 2010 In my company, inventory is valued at cost basis.The net realisable value of inventory does not taken into consideration. But as per AS 2 inventory should be valuated lower of cost and net realisable value. AS – 2; VALUATION OF INVENTORY; Inventories are assets: (a) held for sale in ordinary course of business; (b) in the process of production fro such sale (WIP); (c) in the form of materials or supplies to be consumed in the production process or in the rendering of services. 2. This technique serves the valuation of closing stock easily. 3. This method practically renders the profit and loss most conservative. 4. It is particularly applicable where a certain quantity of basic materials is needed in process for a long time. 5. All the advantages of FIFO and LIFO method will also be applicable in this method. Disadvantages: 1. Accounting Standard 2 – Valuation of inventories is a measurement standard having far reaching implications on the financial statements. AS 2 is applicable to all enterprises, irrespective of the size and nature of business. Though, by number it is two, the AS 2 (revised) is applicable to all enterprises wef 1-4-99 only. The

There are two method of valuation of inventory, i.e., "exclusive method" and "inclusive method". Section 145A and ICDS-2 mandate only "inclusive method". As per this method, duties and taxes should be included in the opening stock, purchase and closing stock.

The value of opening stock is added up to the stock consigned in the current period to obtain the total value of stock with the consignee. Methods of Valuation of Stocks When there is opening stock with the consignee, the rate of valuation of stock is to be ascertained based on the method being adopted for stock valuation. IndAS 2 – The objective of this Standard is to prescribe the accounting treatment for inventories.This Standard provides the guidance for determining the cost of inventories and for subsequent recognition as an expense, including any write-down to net realisable value. check more details about Ind AS 2 Vs AS 2 Accounting standard 2 (AS 2): This Standard deals with the determination of value at which inventories are carried in the financial statements, including the ascertainment of cost of inventories and any write-down thereof to net realisable value. Recently we provide Accounting Standard -1, and How Accounting standards are formulated. Closing inventory valuation has to be done including GST and taxes! In this article we will discuss about an amendment made by Finance Act 2018 that have retrospective effect from Assessment Year 20 18-19. There are two method of valuation of inventory, i.e., "exclusive method" and "inclusive method". Section 145A and ICDS-2 mandate only "inclusive method". As per this method, duties and taxes should be included in the opening stock, purchase and closing stock. Periodic Inventory Method. This method of stock valuation is also known as physical stock taking method or annual stock taking method. Under this system of taking inventories, stock is determined by physical counting at the end of the accounting period i.e. the date of preparation of final accounts. c. While Ind AS 2 (para 25) provides an option to a company to follow either First-in-First-Out method or weighted average method for determining value of inventory, ICDS II (para 16) restricts the method to the one that would reflect the fairest possible approximation to the cost incurred on the inventory.

2. This technique serves the valuation of closing stock easily. 3. This method practically renders the profit and loss most conservative. 4. It is particularly applicable where a certain quantity of basic materials is needed in process for a long time. 5. All the advantages of FIFO and LIFO method will also be applicable in this method. Disadvantages: 1. Accounting Standard 2 – Valuation of inventories is a measurement standard having far reaching implications on the financial statements. AS 2 is applicable to all enterprises, irrespective of the size and nature of business. Though, by number it is two, the AS 2 (revised) is applicable to all enterprises wef 1-4-99 only. The Thus, excise duty provided on finished goods is included in valuation of stock of finished goods. Valuation of inventory of WIP and final products - As per AS-2, while valuing inventories of WIP and final products, the value of inputs ought to be net of duty on inputs, i.e. the purchase cost is reduced by CENVAT credit, if CENVAT credit is available. Of which 10% is normal loss in general, there were no sales in that period and closing stock was 80. Calculate the Inventory value: Normal Loss = 100*10% = 10 Cost per item considering normal loss = 100*10/ 90 = RS 11.11 Abnormal Loss is 90-80 (Normal – closing stock) = 10 Cost of abnormal loss = Rs 111.11 Closing stock Value = Rs 888.89. 3. The value of opening stock is added up to the stock consigned in the current period to obtain the total value of stock with the consignee. Methods of Valuation of Stocks When there is opening stock with the consignee, the rate of valuation of stock is to be ascertained based on the method being adopted for stock valuation. IndAS 2 – The objective of this Standard is to prescribe the accounting treatment for inventories.This Standard provides the guidance for determining the cost of inventories and for subsequent recognition as an expense, including any write-down to net realisable value. check more details about Ind AS 2 Vs AS 2 Accounting standard 2 (AS 2): This Standard deals with the determination of value at which inventories are carried in the financial statements, including the ascertainment of cost of inventories and any write-down thereof to net realisable value. Recently we provide Accounting Standard -1, and How Accounting standards are formulated.