Question 2

Inventories are a key asset in most merchandising retail businesses. However, accounting for and valuing inventory is sometimes challenging for these businesses. The questions that follow relate to the accounting standard as per IFRS that governs accounting for inventories.

1. What standard govern the accounting for inventory? When was this standard issued? When did this standard become effective? (3 marks)
2. Inventories are required to be disclosed as a separate item on the companys balance sheet, identify three items relating to inventories that Must be disclosed.