Inventories Are to Be Measured at the Lower of Cost

question 8

Multiple Choice

Inventories are to be measured at the lower of cost or net realisable value. Net realisable value is defined in AASB 102/IAS 2 Inventories as:

• A) the fair value of the inventories at purchase date.
• B) the amount paid for the purchase of the inventories in an arm's length transaction.
• C) the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.
• D) the estimated buying price in the ordinary course of business.

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