Ind AS 2: Inventories Scope & Exclusion Measurement Cost of inventories (a) Purchase price taxes (b) Freight inwards, (c) Other expenses directly Trade discounts, other similar items Costs excluded: (a (b) Storage costs unless those costs process prior to a further c the inventories to their present (d Cost of purchases Cost of conversion: (a) costs related to the units of (b) and system-heads that are incurred in converting materials into Joint products and By-products Other costs to the extent they are incurred inventories to their e.g. overheads other overheads or cost of designing prodcustomers, Interest and other are usually not included Cost formula (a) FIFO (b) Weighted Average cost method Value Techniques of Measurement of cost Standard cost Method or Retail method Disclosure Requirements (a in measuring Inventories including cost formula used, (b) total carrying cost of inventories with appropriate (c) carrying amount of inventories carried at fair value less costs to sell, (d) amount of inventories recognised as expenses, (e amount of write-down of inventories as expense (f amount of reversal of write down of expense (g) circumstances or events that led to reversal of a writedown of inventories, (h) the carrying amount of inventories pledged as security When Inventories are sold the carrying amount of those as expenses in the period related revenue is recognised Any write-down of Inventories Recognised as expense Any reversal of write-down owing to increase in NRV will result in reversal in inventories recognised as expense 182 4 CHAPTER
SAMPLE CHAPTER IND AS 2 : INVENTORIES
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Preface to Eighth Edition
We all know that a few years have elapsed after International Financial Reporting Standards (IFRSs) have reached the shores of India in its new avatar in the form of Indian Accounting Standards (Ind ASs).
After initial notification of Ind ASs, Ministry of Corporate Affairs have come up with amendments from time to time with a view to ensure that these Ind ASs are internalised and tailored to Indian conditions and there is a clear roadmap going forward. The impact of the implementation of Ind ASs in various industry sectors have been varied as has been borne out of publications and reports in the public domain from various institutions.
This edition of the book professes to address the following areas:
( ) incorporate the latest amendments under Companies (Indian Accounting Standards) (Amendment) Rules, 2023,
( ) come up with process flow diagrams of major Ind ASs to help the reader understand and comprehend the nuances of each Ind AS in its simplest form,
( ) deep dive into Indian Accounting Standards (Ind ASs) and its convergence with IAS/IFRSs updated with latest notified amendments in each of the Ind ASs with charts, illustrations and case studies,
( ) incorporate definitions and application guidance in critical chapters,
( ) provide detailed comparison of Indian Accounting Standards (Ind ASs) with amended Accounting Standards (AS) where applicable,
I-7
( ) case studies on disclosure of Accounting Policies.
( ) More than 150 Multiple Choice Questions on Ind ASs. In developing this work, references have been made from time to time to the notified text on Ind ASs and AS published by Ministry of Corporate Affairs, The Institute of Chartered Accountants of India publications on Indian Accounting Standards (Ind AS), and adaptations from ACCA UK. We have also added a lot more illustrations under respective chapters based on practical issues and questions. We would like to take this opportunity to thank our readers for providing overwhelming support in the first seven editions of this book.
While considerable care has been taken to ensure that the contents of the book are accurate, a few errors and omissions might have crept in, for which we would request our readers with all humility to bear with us.
We would like to dedicate this book to our family members without whose constant inspiration this would not have been possible.
B.D. CHATTERJEE JINENDER JAIN
I-8
About the authors I-5 Preface to Eighth Edition I-7 CHAPTER 1 Financial Reporting in India and Conceptual Framework for Financial Reporting 1 CHAPTER 2 Indian Accounting Standards (Ind AS) Summary 16 CHAPTER 3 Ind AS 1 : Presentation of Financial Statements and Schedule III 73 CHAPTER 4 Ind AS 2 : Inventories 182 CHAPTER 5 Ind AS 7 : Statement of Cash Flows 198 CHAPTER 6 Ind AS 8 : Accounting policies, changes in Accounting estimates and errors 225 CHAPTER 7 Ind AS 10 : Events occurring after the reporting period 253 I-9 Contents
CHAPTER 8 Ind AS 12 : Income Taxes 269 CHAPTER 9 Ind AS 16 : Property, Plant and Equipment 323 CHAPTER 10 Ind AS 17 : Leases 363 CHAPTER 11 Ind AS 19 : Employee benefits 364 CHAPTER 12 Ind AS 20 : Accounting for Government Grants and Disclosure of Government Assistance 408 CHAPTER 13 Ind AS 21 : The Effects of changes in foreign exchange rates 421 CHAPTER 14 Ind AS 23 : Borrowing costs 447 CHAPTER 15 Ind AS 24 : Related Party Disclosures 457 CHAPTER 16 Ind AS 27 : Separate Financial Statements 471 CHAPTER 17 Ind AS 28 : Investments in associates and Joint Ventures 481 CHAPTER 18 Ind AS 29 : Financial reporting in hyperinflationary economies 501 CHAPTER 19 Ind AS 32 : Financial Instruments : Presentation 509 I-10
CHAPTER 20 Ind AS 33 : Earnings per share 553 CHAPTER 21 Ind AS 34 : Interim Financial Reporting 585 CHAPTER 22 Ind AS 36 : Impairment of Assets 603 CHAPTER 23 Ind AS 37 : Provisions, contingent liabilities and contingent assets 657 CHAPTER 24 Ind AS 38 : Intangible Assets 698 CHAPTER 25 Ind AS 40 : Investment Property 741 CHAPTER 26 Ind AS 41 : Agriculture 751 CHAPTER 27 Ind AS 101 : First time adoption of Indian Accounting Standards 760 CHAPTER 28 Ind AS 102 : Share based payment 828 CHAPTER 29 Ind AS 103 : Business Combinations 877 CHAPTER 30 Ind AS 104 : Insurance contracts 942 CHAPTER 31 Ind AS 105 : Non-current Assets held for sale and discontinued operations 966 I-11
CHAPTER 32 Ind AS 106 : Exploration for and evaluation of mineral resources 995 CHAPTER 33 Ind AS 107 : Financial Instruments: Disclosures 1001 CHAPTER 34 Ind AS 108 : Operating Segments 1048 CHAPTER 35 Ind AS 109 : Financial Instruments 1066 CHAPTER 36 Ind AS 110 : Consolidated Financial Statements 1181 CHAPTER 37 Ind AS 111 : Joint Arrangements 1216 CHAPTER 38 Ind AS 112 : Disclosure of Interests in Other Entities 1236 CHAPTER 39 Ind AS 113 : Fair Value Measurement 1254 CHAPTER 40 Ind AS 114 : Regulatory Deferral Accounts 1302 CHAPTER 41 Ind AS 115 : Revenue from Contracts with Customers 1318 CHAPTER 42 Ind AS 116 : Leases 1399 CHAPTER 43 Case Studies on Disclosure of Accounting Policies 1459 CHAPTER 44 Multiple Choice Questions on Ind ASs 1570 I-12
COMPARATIVE SUMMARY BETWEEN IND AS AND AS 1624
ANNEXURE
I-13
183 Para 4.3
4.1 Objective
4.2 Scope
a Financial Instruments Financial Instruments : Presentation
b
4.3 Exclusion
a
b
athese inventories are excluded from only the measurement requirements of this Standard.
b
they are excluded from only the measurement requirements of this Standard.
4.4 Definitions (Para 6)
Net realisable value (NRV) Fair value
4.5 Recognition principle
Inventories a b c
Value Measurement. -
Fair
Para 4.5 184
Recognition Principles 4.6 Measurement of inventories (Para 9) Ind AS 2 : Inventories Inventories shall be measured at the lower of cost and net realizable value 4.7 Cost of inventories the cost of inventories 185 Para 4.7
4.7.1 The cost of purchase of inventories comprise :
4.7.2 The costs of conversion of inventories include
4.7.3 Fixed production overheads
Fixed production overheads
4.7.4 Normal capacity
Normal capacity
a b
ILLUSTRATION 1 ` ` ` Para 4.7 186
` ` 4.7.5 Variable production overheads Variable production overheads ILLUSTRATION 2 ` `
Other costs Cost of Inventories-187 Para 4.7
4.7.6
Costs excluded from valuation of inventories a b cd Ind AS 2 : Inventories ILLUSTRATION 3 ` ` ` ` ` ` ` Solution Particulars ` ` Total Para 4.8 188
4.8
` ` 4.9 Borrowing costs and inventories Borrowing costs . 4.10 Inventories purchased on deferred settlement terms
Cost of agricultural produce harvested from biological assets
Techniques for the measurement of cost 189 Para 4.12
4.11
4.12
4.13 Inventories : Cost formulaes Cost Formulae Para 4.13 190
Illustrated Guide to Indian Accounting Standards (Ind AS)
AUTHOR : B.D. CHATTERJEE, JINENDER JAIN
PUBLISHER : TAXMANN
DATE OF PUBLICATION : MAY 2023
EDITION : 8th Edition
ISBN NO : 9789357782562
NO. OF PAGES : 1716
BINDING TYPE : HARDBOUND
Description:
Rs. 3795 | USD 91
This book provides a comprehensive commentary on the Indian Accounting Standards (Ind ASs) & comprehensive analysis of amended Schedule III of the Companies Act 2013.
The Present Publication is the 8th Edition & updated till April 2023, incorporating the Companies (Indian Accounting Standards) (Amendment) Rules 2023. This book is authored by B.D. Chatterjee & Jinender Jain, with the following noteworthy features:
•[Process Flow Diagrams of Major Ind AS in Simplified & Lucid Language] to help the reader understand and comprehend the nuances of each Ind AS in its simplest form
•[200+ Process Flow Diagrams, Charts, Illustrations & Case Studies] to deep dive into the Ind ASs & their convergence with IAS/IFRS, updated with the latest notified amendments in each of the Ind ASs, based on practical issues and questions
•[Definitions & Application Guidance] are incorporated in critical chapters
•[Detailed Comparative Analysis] of the Ind ASs with the amending Accounting Standards (AS)
•[Case Studies] on disclosure of accounting policies
•[Global Perspective] Each chapter highlights the convergence of each Ind AS with IFRS
•[References] have been made to the following:
oNotified text on Ind ASs & AS published by Ministry of Corporate Affairs
oThe Institute of Chartered Accountants of India Publication on Indian Accounting Standards (Ind AS)
oAdaptations from ACCA UK
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