Ind AS 2 with comparision to AS 2

2. Asset
Construction
Contracts Ind AS-
11
Financial
Instrument Ind AS-
32
Biological Assets
Ind AS-41
Measurement
of Inventories
Agricultural Asset,
Forest Produce
Commodity trade
Not Applicable
Compiled by CA Mohit Goyal M.No 9987059115

3. Inventory
held for sale in
the ordinary
course of
business;
in the process
of production
for such sale; or
in the form of materials
or supplies to be
consumed in the
production process or in
the rendering of
services.
Compiled by CA Mohit Goyal M.No 9987059115

4. Valuation of
Inventory
Material
Cost only
FG is expected to be
sold below cost then
recognize decline
Others
Cost or NRV which
ever is lower
Compiled by CA Mohit Goyal M.No 9987059115

5. Cost
Cost of Purchase
Cost Of
Conversion
Other Cost
NRV
Selling Price Less
Estimated Cost to
sell
Compiled by CA Mohit Goyal M.No 9987059115

6. Joint & By Products
Joint Product or by
product are Material
Cost should be
allocated on rational
and consistent basis
Joint Product or by
product are
Immaterial
By Product= NRV
Main Product=Cost-
NRV of By Product
Compiled by CA Mohit Goyal M.No 9987059115

7. Issue
 Inventory purchased on credit – Rs. 100000
 Cost of same inventory on cash basis- Rs 95000
 Credit period-5 Months
 What will be the value of inventory?
Compiled by CA Mohit Goyal M.No 9987059115
Value of Inventory = 95000
Finance charges=5000 to be written of during the credit period

8. Cost of inventory in case
of service provider
Cost of Production
Cost of inventory of
Agricultural Produce
harvested from biological
assets
Fair Value less cost to sell
Compiled by CA Mohit Goyal M.No 9987059115

9. Techniques to
measure cost
Standard Cost
calculated by cost
department
Retail Cost Method
Sales price- certain
percentage of profit
Compiled by CA Mohit Goyal M.No 9987059115

10. Cost Formulas
Items are not
interchangeable
Use SIMS
Other
FIFO or Weighted
Average
Same cost formula for
the inventories of
similar nature and use
Compiled by CA Mohit Goyal M.No 9987059115

11. Inventory Valued at lower
side at NRV
Subsequently the NRV
increased above Cost
Earlier write down should
be reversed but value of
inventory should not be
more then cost
Compiled by CA Mohit Goyal M.No 9987059115

12. Recognition of Expense
 Expense- Carrying Amount of Inventory
 When-Sale are made and revenue is recognized.
 Write Down and losses – when occurs
 Reversal of write-down- Deduct from the expense
 Inventory Transfer to use in any asset-recognize that as an
expense over the useful life of asset.
Compiled by CA Mohit Goyal M.No 9987059115

13. Disclosures
Amount of
inventory
recognized as
expense
Amount written
down
reversal
Carrying amount
of inventory
held as pledge
Circumstances
which leads to
reversal
Accounting
Policies
Carrying amount
Carrying amount
of agricultural
produce
Compiled by CA Mohit Goyal M.No 9987059115

14. Differences
Basis AS Ind AS
Name Valuation of Inventory Inventories
Application Silent Exclude biological asset, financial
instruments, forest produce etc.
Subsequent Recognition No only valuation Yes
service provider Silent COP
Treatment of financing
arrangement of inventory
Silent Recognize expense over the useful life of
asset
Reversal Not prescribed Value of inventory should not exceed cost
Biological asset no Valued at fair value less cost to sell
Disclosure Some new disclosures
Compiled by CA Mohit Goyal M.No 9987059115

15. Compiled by CA Mohit Goyal M.No 9987059115
Thanks
CA Mohit Goyal
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