Question

A manufacturing entity has a stock of finished goods with a total Historical Cost of ₹12,00,000. Due to a market slowdown in early 2026, the estimated selling price of this stock is ₹11,50,000. The entity expects to incur a 5% brokerage commission on the sale and ₹20,000 in specialized packaging costs to ship the goods to the buyer. What should be the value of inventory in the Balance Sheet as per Ind AS 2?

Q: Answer-A manufacturing entity has a stock of finished goods with a total Historical Cost of ₹12,00,000. Due...

As per Accounting standards, inventory must be valued at the Lower of Cost or Net Realizable Value NRV. Cost Given as 12,00,000. Calculating NRV Estimated Selling Price 11,50,000 o Less Estimated costs necessary to make the sale 5 of 11,50,000 57,500 o Less Estimated costs of completion Packaging 20,000 Thus, NRV 11,50,000 - 57,500 20,000 , , . Since NRV 10,72,500 is lower than Cost 12,00,000, the inventory is recorded at 10,72,500.