Question
Super Ltd had 500 units of product X at  3 0 Â
January 2026 . The product had been purchased  at a cost of Rs.18 per unit and normally sells for Rs.24 per unit. Recently, product X started to deteriorate but can still be sold for Rs.24 per unit, provided some rectification work is undertaken at a cost of Rs.3 per unit. What is the value of closing inventory at  31 March 202 6 . ÂSolution
As per AS – 2, the inventories are to valued at cost or NRV, whichever is lower. Here, cost = 18 and NRV = 24-3=21. So, lower among the two is cost, i.e. 18*500 units.
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