IAS 2 INVENTORIES – NET REALIZABLE VALUE AND WRITE-OFF
Hi: Good morning: Henk:
Would you be kind to let me know the IFRS – IAS 2 concerning to ret realizable value and write-off: 1. How to handle the declined value of inventory stocks? 2. What is the correct procedure to write-down of damaged or obsolete items?
Thanks for your assistance.
The easy way would be that the outcome using a flat rate does not materially differ from using the (IFRS correct) effective rate. Otherwise the accounting needs to either
- keep a separate ledger to account for income using an effective rate (for example a spreadsheet) and adjust it for financial statement purposes, or
- calculate the difference between flat rate and an effective (average) rate for a period (month, quarter or year, the shorter the more real) and adjust the income amount.
If an institution is recognizing income by using flat rate method, but IFRS requires to recognize by using effective rate method. My questions are:
I don’t think so, see this link
Can anyone confirm if the PRC has officially transitioned to full IFRS GAAP reporting and if so, what was the effective date? Are companies mandated to report in IFRS GAAP or can they still report in PRC GAAP up to a certain point?
Thanks for any clarification any of you can provide.
Also, if you have any resources you might refer me to, that would be great.
b) How to convert portfolio by using effective rate.?