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[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section admin_label=”Section” fullwidth=”off” specialty=”off”][et_pb_row admin_label=”Row”][et_pb_column type=”1_2″][et_pb_text admin_label=”Text” background_layout=”light” text_orientation=”center” text_font_size=”14″ use_border_color=”off” border_color=”#ffffff” border_style=”solid”] [button link=”http://www.frs102.com/members/premium-toolkit/” type=”big” color=”red”] Return to Main Index[/button] [/et_pb_text][/et_pb_column][et_pb_column type=”1_2″][et_pb_text admin_label=”Text” background_layout=”light” text_orientation=”center” text_font_size=”14″ use_border_color=”off” border_color=”#ffffff” border_style=”solid”] [button link=”http://frs102.com/members/premium-toolkit/section-13/” type=”big” color=”red”] Return to Section 13 Home[/button] [/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section admin_label=”Section” fullwidth=”off” specialty=”off” transparent_background=”off” allow_player_pause=”off” inner_shadow=”off” parallax=”off” parallax_method=”off” padding_mobile=”off” make_fullwidth=”off” use_custom_width=”off” width_unit=”on” make_equal=”off” use_custom_gutter=”off” gutter_width=”3″][et_pb_row admin_label=”Row”][et_pb_column type=”4_4″][et_pb_text admin_label=”Main Body Text” background_layout=”light” text_orientation=”justified” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]Disclosures
Extract from FRS 102 – Section 13.22
13.22 An entity shall disclose the following:
(a) the accounting policies adopted in measuring inventories, including the cost formula used;
(b) the total carrying amount of inventories and the carrying amount in classifications appropriate to the entity;
(c) the amount of inventories recognised as an expense during the period;
(d) impairment losses recognised or reversed in profit or loss in accordance with Section 27; and
(e) the total carrying amount of inventories pledged as security for liabilities.
OmniPro comment
In addition to the above company law requires a disclosure stating whether the replacement cost differs substantially from the carrying amount and where this differs substantially the amount by which is differs must be stated. Detailed below is an illustration of the various disclosure requirements which would meet the requirements above and includes all company law requirements. An additional disclosure which was not required under old GAAP but is required under FRS 102, is the disclosure of the inventory recognised as an expense during the period.
Example 11 – Extract from an accounting policy note and required inventory disclosures
Stocks
Stocks comprise consumable items and goods held for resale. Stocks are stated at the lower of cost and net realisable value. Cost is calculated on a first in, first out basis and includes invoice price, import duties and transportation costs. Net realisable value comprises the actual or estimated selling price less all further costs to completion or to be incurred in marketing, selling and distribution.
At the end of each reporting period stocks are assessed for impairment. If an item of stock is impaired, the identified inventory is reduced to its selling price less costs to complete and sell and an impairment charge is recognised in the profit and loss account. Where a reversal of the impairment is recognised the impairment charge is reversed, up to the original impairment loss, and is recognised as a credit in the profit and loss account.
Extract from notes to the financial statements
- Stocks
| 2015 | 2014 | ||
| CU | CU | ||
| Raw material | 33,724 | 42,108 | |
| Precast concrete products | 71,769 | 84,968 | |
| Work in progress | 674,216 | 345,090 | |
| 779,709 | 472,166 |
The net replacement cost of stocks is not expected to be materially different from that shown above.
Stocks recognised as an expense in the period were CU2,000,000. Stocks are stated after provisions for impairment of CU32,000 (2014: CU28,000).
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