Question

Which of the following would not be included in the definition of inventory under IFRS?

Entry field with incorrect answer
A. Office computer used by the accounting department of a company.
B. Photocopy paper held for sale by an office supply store.
C. Office furniture held for sale by an office furniture store.
D. All of these answer choices are correct.

Answer 1

An office computer used by the accounting department would not be included in the definition of inventory under IFRS, as it is not held for sale and is usually categorized as a fixed asset.

Step-by-step explanation:

Under the International Financial Reporting Standards (IFRS), inventory is defined as assets that are:

• Held for sale in the ordinary course of business.
• In the process of production for such sale, or
• In the form of materials or supplies to be consumed in the production process or in the rendering of services.

Given this definition, the item that would not be included in the definition of inventory under IFRS is A. Office computer used by the accounting department of a company. This is because an office computer is not held for sale, nor is it in the process of production; it is typically categorized as a fixed asset or property, plant, and equipment (PPE) rather than inventory. On the other hand, B. Photocopy paper held for sale by an office supply store and C. Office furniture held for sale by a furniture store are both examples of items that would be considered inventory, as they are held for sale in the regular course of business.