07-03-2006, 01:58 AM
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
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
