Valuation of stock & wip

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Rajesh (Querist)
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18 November 2011 our company provides construction contracting & electrical engineering services to defence department of India. Contract includes both. Our consultant says that in addition to purchase cost & direct expenses, indirect expenses should also be included in the value of inventory i.e. stocks & WIP. Is it correct to do so? Please post your reply urgently.

Rajnish Singh

Rajnish Singh (Expert)
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18 November 2011 Dear

As per Accounting standard of valuation of Industries and nature of your defined business.

the follwoing mannaer has to adopt in valuation of Inventories & WIP>

# valueate all your stocks of raw material, material at site etc.

# valuate your work in progress .

# at a time of valuation of raw materials , which valuation method are followed by company has to follow.

and accordingly wip will be valuate.