What do you reckon, should materials be written down if they’re slow moving? The answer to this question isn’t as black and white as you may think.
When it comes to finished goods, the answer is more inclined towards “yes” since they’re first off slow moving which indicates they’re more likely to be sold lower their cost, and more so since they’re finished items from raw materials. It’s not that easy to use those goods for something else, i.e. scrap them to materials. Continue reading
Similarly to transportation expenses which are included within the cost price of a stock item, so are the import and other taxes you won’t be able to get back from the state and / or tax authorities. As IAS 2 puts it: “The costs of purchase price of inventories comprise the purchase price, import duties and other taxes (other than those subsequently recoverable by the entity from the taxing authorities).” Continue reading
Transportation cost is something you’re quite probably paying on your items as you purchase them. Regardless if you’re transporting them on your own, you buy the service from someone or you let your supplier to transport the goods, you’re still encountering expenses related to transportation. Continue reading
When settling your receivables and payables, you’re not actually paying any cash (or at least not for the full amount). Thinking about the statement of cash flows now I would say that you’re not supposed to show those transactions there either. Continue reading
International Financial Reporting Standards (in short IFRS) are describing contingent assets as “possible assets that arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity”. Continue reading
As you obtain information that the entity is likely to incur outflows from certain events, you treat them as provisions and recognize respective liabilities and expenses as soon as the information becomes available to you.
However, what happens if it turns out that there have been changes to the situation so that that entity is less likely to incur the expenses in the light of this new information? Continue reading
There’s an asset on your balance sheet you’re not using and you plan to sell. Say it’s carrying value is 7,500 and what you aim to get for it is close to it’s carrying value. However, as it turns out, you get serious offers for the asset for 5,000. No doubt you can see that your asset is valued higher you’re likely to get for it once you sell it. Continue reading