11-02-2003, 11:04 PM
final note.
Pervez in the wine example NRV(future expected price) = Nil
ie under the scaneiro the price would continually to fall to nil and then it would become a laiblity to keep the stock. therefore, If i am faced with this problem, i will insist that whatever is the NRV (At balanace sheet date) it has no value since the stock is contaimnated and the provison for obsolete stock shoud be provided to make it nil,,, plz. refer to standard on post balance sheet events, which says if the auditor becomes aware of a such a problem and the finacial statements are not issued, adjustments are mandatory without andy if or but, and if i am not mistaken it also says that if the statements are already issued but AGM is not held, auditor should consider a motion in AGM, I am pretty sure about that, thought I didnot ever exercise it. As an auditor you might take a different view, well i welcome that. but i am only worried about the monitoring visit for my audit, and I dont think they would like it very much that I had the info. that Sotck is going to be nil, yet I allowed a valuation.... I would not take the risk,,,,plenty of standards to backup the treatments including prudence and PBSE.
however, normally NRV (is at balance sheet date only), but the wine example was a different case.
Thanks
zubair
Pervez in the wine example NRV(future expected price) = Nil
ie under the scaneiro the price would continually to fall to nil and then it would become a laiblity to keep the stock. therefore, If i am faced with this problem, i will insist that whatever is the NRV (At balanace sheet date) it has no value since the stock is contaimnated and the provison for obsolete stock shoud be provided to make it nil,,, plz. refer to standard on post balance sheet events, which says if the auditor becomes aware of a such a problem and the finacial statements are not issued, adjustments are mandatory without andy if or but, and if i am not mistaken it also says that if the statements are already issued but AGM is not held, auditor should consider a motion in AGM, I am pretty sure about that, thought I didnot ever exercise it. As an auditor you might take a different view, well i welcome that. but i am only worried about the monitoring visit for my audit, and I dont think they would like it very much that I had the info. that Sotck is going to be nil, yet I allowed a valuation.... I would not take the risk,,,,plenty of standards to backup the treatments including prudence and PBSE.
however, normally NRV (is at balance sheet date only), but the wine example was a different case.
Thanks
zubair
