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I-Different types of inventory : II-Valuation Rule : A) Net Realizable Value

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I-Different types of inventory : II-Valuation Rule : A) Net Realizable Value
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  Lecture 9 : Inventory evaluation I- Different types of inventory : => Stocks = important business asseta) Retail entity : - Good for resale - onsumables b) !anufacturin" entity : - ra# material - #ork in pro"ress- finis$ed "ood - consumables II- Valuation Rule : A) Net Realizable Value %R& : %et reali'able value (%R&) is a met$od of evaluatin" an assets #ort$ #$en $eld in inventory* in t$e field of accountin"+ %R& is part of t$e Generally ,ccepted ,ccountin" rinciples and International .inancial Reportin" Standards (I.RS) t$at apply to valuin" inventory+ %et reali'able value is "enerally e/ual to t$e sellin" price of t$e inventory "oods less t$e sellin" costs (completion and disposal)+It is e0pected sales price less sellin" costs Net Realizable Value (NRV) = Estimated ellin! "ri#e - $ost of $ompletion and Disposal#f A#tivity % !arket = urrent Replacement ost If urrent Replacement ost > %et Reali'able &alue (%R&)* t$en %R& is !arket+ If urrent Replacement ost 1 (%R& - %ormal rofit !ar"in)* t$en (%R& - %ormal rofit !ar"in) is !arket  % - &'y NRV  $ost of !oods  ( tor/ue use cette r2"le daccountin"3) 4- 5ama"ed "oods6- 7ne0pected fall in market prices8- Loss leader "oods- ad buyin" decisions => Solution de pr;vention* fiable mal"r; non profit ) .un"ible problem inventory 8 #ay of sellin" an inventory : .   .irst in* first out (.I.<) t$e oldest inventory is sold first Last in* first out (LI.<) t$e most recently purc$ased inventory is sold first ,vera"e cost (,&<) t$e cost of sales is t$e avera"e cost of all t$e purc$ases of inventory $) Estimate t'e invoi#e pri#e : Input ta0 : #$en you ( t$e business) buy t$e "ood <utput ta0 : #$en t$e customer buy t$e "ood!R (er !aestys Revenue and ustoms ) : <utput ta0 -Input ta0 ?normement de facteur a prendre en consid;ration : => @ransport costA andlin" cost A @a0
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