'Net Realisable Value' of Inventories Is Defined in AASB 102

question 28

Multiple Choice

'Net realisable value' of inventories is defined in AASB 102 as the estimated selling price in the ordinary course of business:

• A) in a forced sale.
• B) plus the estimated costs necessary to make the sale.
• C) less the estimated costs of completion and the costs necessary to make the sale.
• D) plus the estimated costs of completion and the estimated costs necessary to make the sale.

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Definitions:

Equity-Financed

Pertains to the method of raising capital by selling company shares rather than borrowing funds.

Earnings Per Share

A company's net profit divided by the number of its shares outstanding, indicating how much money each share of stock earns.

Merger

The combination of two or more companies into a single entity, typically to achieve synergistic benefits, expand market reach, or gain efficiencies.

Purchase Accounting Method

An accounting method used in mergers and acquisitions to consolidate the financial statements of both companies, where the purchaser's statements incorporate the assets and liabilities of the acquired company at their fair market values.