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+--- Thread: IAS 2 .......QUERIES (/thread-ias-2-queries)
IAS 2 .......QUERIES - nabeelanwer - 07-02-2006
HELLO FRIENDS
WHAT WOULD BE THE TREATMENT OF REBATE ON IMPORTS AND EXPORTS OF INVENTORY??
- insaan - 07-03-2006
IAS 2 para 11 reads as under
The costs of purchase of inventories comprise the purchase price, import duties and other taxes (other than those subsequently recoverable by the entity from the taxing authorities), and transport, handling and other costs directly attributable to the acquisition of finished goods, materials and services. <b>Trade discounts</b>, <b>rebates </b>and <b>other similar items are deducted in determining the costs of purchase.</b>
so
any rebate on import of inventory shall be deducted in determininig cost of purchase of inventory
look inventory cost = purchase cost + conversion cost(conversion cost is the cost of converting raw material into WIP and finished goods,comprising both fixed and variable overheads)+other directly attributable costs
itz gud to ask questions
just read thoroughly and ask questions from urselves
wat examiner might ask question regarding IAS
as expectations of examiner are now increasig day by day
so i wud ecourage u asking questions
i wud try to reply as far as i know
and for rest seniors may help us
here i wud ask somebudy to give a correct definition of rebate...though i have an idea but exact wording wud make the scene better
- Abdur.Rehman - 07-03-2006
Discount and rebate are quite similar words and often used interchangeably.
But as per my understanding, a discount is applied according to a predetermined rate.
and a rebate is the straight deduction of an amount from the amount payable.
for example. U may get shoes at a discount of 10%. But if it is written outside that shop, that a Rs. 100 reduction on shoes costing less than 1,000 and a Rs. 200 reduction on shoes costing between 1,500 and 2,000, then this is rebate.
- nabeelanwer - 07-04-2006
<blockquote id="quote"><font size="1" face="Verdana, Tahoma, Arial" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by insaan</i>
<br />IAS 2 para 11 reads as under
The costs of purchase of inventories comprise the purchase price, import duties and other taxes (other than those subsequently recoverable by the entity from the taxing authorities), and transport, handling and other costs directly attributable to the acquisition of finished goods, materials and services. <b>Trade discounts</b>, <b>rebates </b>and <b>other similar items are deducted in determining the costs of purchase.</b>
so
any rebate on import of inventory shall be deducted in determininig cost of purchase of inventory
look inventory cost = purchase cost + conversion cost(conversion cost is the cost of converting raw material into WIP and finished goods,comprising both fixed and variable overheads)+other directly attributable costs
itz gud to ask questions
just read thoroughly and ask questions from urselves
wat examiner might ask question regarding IAS
as expectations of examiner are now increasig day by day
so i wud ecourage u asking questions
i wud try to reply as far as i know
and for rest seniors may help us
here i wud ask somebudy to give a correct definition of rebate...though i have an idea but exact wording wud make the scene better
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
THanks! Insaan
1- Please also clearify the treatment for rebate on exports!
should it be ignored?
- insaan - 07-04-2006
no dont ignore it
exports are just like ur sales
and
here is da defintion of net sales
Net Sales - Sales at gross invoice amounts less any adjustments for returns, allowances, or discounts taken
so simply reduce ur gross sales by such rebate to arrive at net sales
- nabeelanwer - 07-04-2006
ok i got it , thanks & regard