Agenda decision clarifies costs necessary to sell inventories

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EY Global IFRS

14 Jul 2021 PDF
Categories Other IFRS

The IFRS Interpretations Committee has clarified what costs are necessary to sell inventories when determining net realisable value.

Entities will need to use judgement, considering the specific facts and circumstances (including the nature of inventories), to determine which of their costs are necessary to sell their inventories under IAS 2 Inventories. However, entities will not be able to limit the costs they include to those that are only incremental if doing so would exclude non-incremental costs that must be incurred to sell inventories.