Question

A wholesaler which prepares its financial statements according to International Financial Reporting Standards (IFRS) has the following per-unit costs for one of its products: Cost $ 18.00 Net realizable value $ 15.00 Net realizable value less normal profit margin $ 14.40 Current replacement cost $ 14.70 In accordance with IFRS, what is the per-unit carrying value of inventory in the statement of financial positions?

Answer 1

$15.00

Step-by-step explanation:

Data provided in the question:

per-unit costs for one of its products = $18.00

Net realizable value = $15.00

Net realizable value less normal profit margin = $14.40

Current replacement cost = $14.70

Now,

Here, we have to find the per-unit carrying value of inventory in the statement of financial positions in accordance with IFRS

According to the IFRS, inventory should be recorded in financial statements at a value which is lower of the cost and Net Realizable Value

Therefore,

according to the question:

per-unit carrying value of inventory = lower of [ $18.00, $15.00]

or

per-unit carrying value of inventory = $15.00