I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

PART D: RECORDING TRANSACTIONS AND EVENTS 

 

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5.7 Recognition as an expense 

The following treatment is required when inventories are sold: 

(a) 'The carrying amount of those inventories shall be recognised as an expense in the period in 

which the related revenue is recognised'. 

(b) 

'The amount of any write down of inventories to net realisable value and all losses of inventories 

shall be recognised as an expense in the period the write down or loss occurs'. 

(c) 

'The amount of any reversal of any write down of inventories, arising from an increase in net 

realisable value, shall be recognised as a reduction in the amount of inventories recognised as an 

expense in the period in which the reversal occurs'.   

(IAS 2, para. 34) 

5.8 Disclosure 

Disclosures in the financial statements include the following: 

(a) 'The