which of the following is a required disclosure for inventory? a. Inventory valuation method used (FIFO, LIFO, moving average) and percentage of inventory valued under each method. b. LIFO or current cost if the inventory is valued using FIFO. c. Type of inventory system.

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Social Studies

Jamison Prince

20 September, 12:51

which of the following is a required disclosure for inventory? a. Inventory valuation method used (FIFO, LIFO, moving average) and percentage of inventory valued under each method. b. LIFO or current cost if the inventory is valued using FIFO. c. Type of inventory system.

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Answer:A - Inventory valuation method used (FIFO, LIFO, moving average) and percentage of inventory valued under each method.

Explanation: Disclosure of inventory as required by IAS 2 States that inventory must be measured at the lower of cost and net realisable value.

It also states that the method of stock valuation should be disclosed. Methods include FIFI, LIFO or Weighted Average.

Stock valuation is a very vital part of the financial statement as the stock in the books is an asset to the organisation and if its not well valued it will affect the overall value of the organisation.

It also states that any stock written off must be stated in the books of accounts.