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PRESENTED BY; SHUAIB ADEADEBAYO 
ACA,CFE,ACCA…….
 IAS 2 States that inventory must be valued at 
lower of cost and net realizable value
DOES NOT APPLY TO THE FOLLOWING
ELEMENTS OF 
INVENTORIES ARE:
COST OF INVENTORIES
COSTS OF CONVERSION
ISSUES TO REMEMBER
COST OF GOODS SOLD FORMULA 
N 
 Opening Inventory X 
 Add: Purchases X 
 Add: Carriage Inwards X 
 Less: Returns Outwards (X) 
 Total goods Available X 
 Less: Closing Inventory (X) 
COST OF GOODS SOLD X
Ias 2 inventory valuation
Ias 2 inventory valuation

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Ias 2 inventory valuation