INVENTORY - CURRENT ASSET

 

Inventory types: raw materials , work-in-progress and finished goods  Inventory must be recorded at lower of cost or net realisable value (NPV) Difference recorded as Dr Impairment loss on inventory (expense) Cr Inventory (current asset) Prudence Concept FIFO - goods bought first, sold first (Best valuation method) Weighted average - $average cost of goods bought /per unit LIFO (removed from International Financial Reporting Standards IFRS due to its profit manipulation potential)
Sales & Purchases               Calculating Gross Profit :   Inventory Account: Decrease in value of inventory           Impairment loss on Inventory account: