International Financial Reporting Standards (IFRS)

IFRS for Small and Medium-sized Entities (SMEs)
Section 13: Inventories

1. Inventories are measured at the lower of (A) and (B)
--> (A) cost
--> (B) estimated selling price - costs to complete and sell

2. If (B) < carrying amount
--> recognise impairment loss

3. Examples of expenditures
--> not included in the cost of inventories
(1) abnormal waste
(2) selling costs
(3) administrative overheads after initial purchase
(4) storage costs after production

4. Cost formulas permitted
(1) weighted average cost
(2) first-in, first-out (FIFO)

5. Last-in, first-out (LIFO)
--> is not permitted