25 June 2013
pls tell me.. we have an client who value their stock on average cost method. but the market value of stock is very less. they are not in favour of valuing stock at market value...
then the question is whether there is any solution for valuing stock at cost....
26 June 2013
As per AS 2, stock has to be valued at lower of cost or net realisable value whichever is lower. If the management is not favourable of writing down the stock value, then the auditor has to qualify for non compliance of AS 2.
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