Valuation of inventory

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Nandini Rao (Querist)
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22 May 2013 Dear Sir/Madam,

If a trust receives donation to purchase books & say Rs.50/- is the donation amount for 1 book and the trust spends Rs.100/- for each book, then while valuing inventory of books, what should be the value of each book?

Should it be Rs.100/- per book or Rs.50/- per book?

Kindly elucidate with reference to AS-2.

Thanking you in advance.

CA.Tarun Maheshwari

CA.Tarun Maheshwari (Expert)
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23 May 2013 I think stock value should remain a the market price or cost whichever is less (in this case : Rs 100/-). It should not have any connection with donation amount recieved, because the trust is still speding the balance amount from its own sources.

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