Indian Accounting Standard (Ind AS) 2

Inventories
Contents
OBJECTIVE

Paragraphs 1

SCOPE

2-5

DEFINITIONS

6-8

MEASUREMENT OF INVENTORIES
Cost of inventories
Costs of purchase

9-33
10-22
11

Costs of conversion

12-14

Other costs

15-18

Cost of inventories of a service provider

19

Cost of agricultural produce harvested from biological assets

20

Techniques for the measurement of cost

21-22

Cost formulas

23-27

Net realisable value

28-33

RECOGNITION AS AN EXPENSE

34-35

DISCLOSURE

36-39

APPENDICES
A. References to matters contained in other Indian Accounting Standards
1. Comparison with IAS 2, Inventories

Indian Accounting Standard (Ind AS) 2
Inventories
(This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold italic type indicate the main principles.) Objective
1.
The objective of this Standard is to prescribe the accounting treatment for inventories. A primary issue in accounting for inventories is the amount of cost to be recognised as an asset and carried forward until the related revenues are recognised.
This Standard deals with the determination of cost and its subsequent recognition as an expense, including any write-down to net realisable value. It also deals with the cost formulas that are used to assign costs to inventories.

Scope
2.

This Standard applies to all inventories, except:
(a)

(b)

financial instruments (see Ind AS 39 , Financial Instruments:
Recognition and Measurement and Ind AS 32, Financial
Instruments: Presentation); and

(c)

3.

work in progress arising under construction contracts, including directly related service contracts (see Ind AS 11,
Construction Contracts;

biological assets (i.e., living animals or plants) related to
agricultural