IAS 2 — Inventories

Programme Overview

IAS 2 sets the rule that inventory can never be carried at more than it can actually be sold for. This programme covers what belongs in cost, the two accepted cost formulas, and when stock needs to be written down.

Why This Programme

• ✓Know exactly what belongs in the cost of inventory
• ✓Apply FIFO and weighted-average cost formulas correctly
• ✓Measure inventory at the lower of cost and net realisable value
• ✓Handle inventory write-downs correctly
• ✓Avoid the common inventory costing mistakes
• ✓Meet the disclosure requirements confidently

Assessment

• ✓Cost Determination Exercise
• ✓Cost Formula Case Study
• ✓Write-Down Workshop
• ✓Final Review

Main Modules

• What's Included in Cost
  Purchase costs, conversion costs, and what stays out
• Cost Formulas
  FIFO and weighted-average, and when each applies
• Net Realisable Value & Write-Downs
  When and how to write inventory down
• Disclosure Requirements
  What must be disclosed about inventory balances