Case (a) Al Omar Corporation is a manufacturer of food and beverages in Oman. The following information was relevant to the inventories of the business. For the last 5 years the corporation was adopting standard costing method for valuing its inventory. The variances of standard cost were insignificant to date and the corporation usually written off those variances in the published financial statements. By doing this process, the corporation has encountered the following problems:

The corporation has found out that the material cost and labor cost were increasing when the standard cost variances are far greater.

The products were produced according to the market survey of demand and consumption but the ultimate result was just opposite. According to survey there were large number of products produced but at the end of the year large number of finished products were kept in a factory stores as unsold. This situation was partially attributable to the corporation being considered overpriced. The management of the corporation decided to write off these variances directly as term costs and the cost of the part of the unsold finished products were also written off.

Case (b) The raw materials of confectioneries on hand represents eight months of usage. But two months of usage only represented to the inventory levels. The initial cost is more than the replacement cost of the value of inventories.

Required: By considering the above situation mentioned in Case (a) and Case (b), on the role of an accountant how would you treat the scenario as per the requirements of IAS 2?