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IAS 2 Inventories

Inventories prescribes the accounting treatment for inventories; it provides guidance on the determination of cost and its subsequent recognition as an expense, including any write-down to net realisable value.

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Summary

IAS 2 requires that inventories are measured at the lower of cost and net realisable value. ‘Cost’ includes all costs of bringing the item to its current location and condition.

The cost of inventories should be assigned using either the first-in first-out or weighted average cost method.

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