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INVENTORIES

INVENTORIES. FRS 102 Puan Yusliena Yusoff. FRS 102- Inventories. Gives guidance to the determination of cost of inventories, cost formulas used to assign cost to inventories, the amount recognized as expenses and write downs to NRV. NRV.

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INVENTORIES

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  1. INVENTORIES FRS 102 Puan Yusliena Yusoff

  2. FRS 102- Inventories • Gives guidance to the determination of cost of inventories, cost formulas used to assign cost to inventories, the amount recognized as expenses and write downs to NRV

  3. NRV • FRS 102 defined NRV as “the estimated selling price in the ordinary course of business less estimated cost of completion and the estimated cost necessary to make sales”

  4. Cost of inventories • Cost of purchase (including taxes, transport and handling) net of trade discount received • Cost of conversion (including fixed and variable manufacturing overheads) • Other cost incurred in bringing the inventories to their present location and condition

  5. FRS 110- Events after balance sheet date • Defined as “those events, both favorable and unfavorable that occur between the balance sheet and the date when the financial statements are authorized for issue”

  6. Types of event • Adjusting event- provides further evidence that existed on balance sheet date • Non- adjusting event- condition that arose after balance sheet date

  7. Adjusting events • Measurement of bad debts • Determining NRV of inventory • Court case • Impairment of assets • Acquisition and disposal of assets • Profit sharing or bonus • Fraud

  8. Non- Adjusting events • Business combination • Plan to discontinue an operation • Purchase/ disposal of assets by government • Destruction of a major production of plant • Prices of foreign exchange rates • Changes in tax rates or law • Capital commitment & contingent liabilities

  9. Dividends • Declared after the balance sheet date is not a liability at the balance sheet date • Going concern • No longer applicable if the company intend to cease from trading after the balance sheet date

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