Where the Net Realisable Value of Inventories Falls Below Cost

question 14

Multiple Choice

Where the net realisable value of inventories falls below cost, AASB 102 Inventories requires that:

• A) no adjustment be made, but the difference between net realisable value and cost be disclosed in the notes to the financial statements.
• B) the difference be added to the carrying amount of the inventories.
• C) inventories continue to be carried in the statement of financial position at cost.
• D) inventories be written down to net realisable value.

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Definitions:

Compact Bone

Dense, hard tissue that forms the outer layer of bones, providing strength, structure, and the ability to withstand stresses.

Trabeculae

The network of supportive fibrous bundles in organs like the heart or the spongy bone structure, providing structural support.

Spongy Bone

Also known as cancellous bone, a porous type of bone tissue found at the ends of long bones and in the inner layer of other bones, providing structural support.

Concentric Lamellae

Circular layers of bone matrix in osteons that surround a central canal, providing strength and support to bone.