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Standard cost example

9 August 2010 2,865 views 6 Comments

Does anyone know where I can find an example of how standard costing would be reported under IFRS.

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6 Comments »

  • ifrslist
    ifrslist said:

    [New Post] Standard cost example – http://www.ifrslist.com/2010/08/standard...
    via Twitoaster

    # 9 August 2010 at 7:15 pm
  • Twitted by ifrslist said:

    [...] This post was Twitted by ifrslist [...]

    # 9 August 2010 at 8:23 pm
  • patriciawalters said:

    I’m sorry, I don’t really understand what you are asking.

    If you are talking about what to do with inventory cost variances, the answer is that you cannot defer them when you present financial statements, neither for interim reporting or end of year reporting.

    Your inventory account on the balance sheet must be measured at actual costs, not standard costs.

    Does that answer your question? If not, would you post again, please.

    Patricia Walters

    # 9 August 2010 at 9:48 pm
  • patriciawalters said:

    I’m not sure if I was clear above.

    If you are keeping information about the variance between standard costs and actual costs in debit or credit balance accounts (that do not meet the definition of an asset or a liability) in your information system,

    These temporary accounts would always be closed to inventory at the end of the fiscal year.

    Under some GAAPs, you could retain the debit or credit balance accounts for the variances on your balance sheet when you prepared interim statements.

    Under IFRS, you must also close these accounts to inventory for interims.

    Patricia Walters

    # 9 August 2010 at 9:53 pm
  • sayutining wuri said:

    I don’t really clear what is the question.
    May you re-announce and re-elaborate your question please.
    It will about the definition, accounting treatment, or else?

    # 10 August 2010 at 5:45 am
  • Mladek (author) said:

    Thanks for your answer. But it’s not exactly my problem.

    I have a client considering a transition to IFRS (from a continental national GAAP).

    Unfortunately, he noticed that IAS 2.21 states: Techniques for the measurement of the cost of inventories, such as the standard cost method or the retail method, may be used for convenience if the results approximate cost.

    Since he currently uses standard costs, he wants to interpret this in a way that will allow him to use standard costs in his IFRS report.

    What I was looking for was a realistic example of the adjustments that would have to be made (every period) to make this method IFRS complaint (and, hopefully, get him to change his mind).

    If I could find such an example on the internet, it would simply make my life a bit easier.

    # 10 August 2010 at 7:19 am

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