The document discusses the measurement of inventory under Philippine accounting standards. It states that inventory shall be measured at the lower of cost or net realizable value according to PAS 2. Cost flow assumptions like first-in, first-out (FIFO) determine how inventory units are valued. Inventories can be interchangeable or not interchangeable, and specific identification is used for the latter. Periodic or perpetual inventory systems can also be used.
The document discusses the measurement of inventory under Philippine accounting standards. It states that inventory shall be measured at the lower of cost or net realizable value according to PAS 2. Cost flow assumptions like first-in, first-out (FIFO) determine how inventory units are valued. Inventories can be interchangeable or not interchangeable, and specific identification is used for the latter. Periodic or perpetual inventory systems can also be used.
The document discusses the measurement of inventory under Philippine accounting standards. It states that inventory shall be measured at the lower of cost or net realizable value according to PAS 2. Cost flow assumptions like first-in, first-out (FIFO) determine how inventory units are valued. Inventories can be interchangeable or not interchangeable, and specific identification is used for the latter. Periodic or perpetual inventory systems can also be used.
The document discusses the measurement of inventory under Philippine accounting standards. It states that inventory shall be measured at the lower of cost or net realizable value according to PAS 2. Cost flow assumptions like first-in, first-out (FIFO) determine how inventory units are valued. Inventories can be interchangeable or not interchangeable, and specific identification is used for the latter. Periodic or perpetual inventory systems can also be used.
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First-in,
First-out I N T E R M E D I AT E ACCOUNTING 1 Measurement of Inventory PAS 2 , paragraph 9, provides that inventories shall be measured at Lower of Cost or Net Realizable Value” Measurement of Inventories
Cost Inventories Net Realizable Value Illustration: The following data pertain to an inventory item: Date Transaction Units Unit Cost Total Cost Sales in Units Jan. 1 Beginning 800 ₱ 200.00 ₱ 160,000.00 Balance Jan. 8 Sale 500 Jan. 18 Purchases 700 ₱ 210.00 ₱ 147,000.00 Jan. 22 Sale 800 Jan. 31 Purchases 500 ₱ 220.00 ₱ 110,000.00
The ending inventory is 700 units
Measurement of Inventories
Interchangeable
Cost Not Inventories Interchangeable Net Realizable Value Measurement of Inventories Periodic
First-in, First-out
Perpetual
Interchangeable
Periodic Weighted Cost Average Perpetual Inventories (Moving Average) Net Realizable Not Specific Value Interchangeable Identification Measurement of Inventories Periodic
First-in, First-out
Perpetual
Interchangeable
Periodic Weighted Cost Average Perpetual (Moving Average) Not Specific Inventories Interchangeable Identification
