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Accounting treatment for expired medicines

alka sharma (Manager- Finance) (26 Points)

20 August 2015

what will be the accounting enteries for recognising loss on expired medicines and consumable in the hospital accounting

thanks

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2 Replies

ish kumar sharma (Sr. Manager Accounts & Finance) (301 Points)
Replied 20 August 2015

it should be like:-

Loss by expiry Dr.

To Purchases of consumables

hope you got your answer

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Viral Patel (9 Points)
Replied 27 November 2015

Hi alka, I want to ask you one question. May I know how we recognise waste materia as on the balance sheet date. As per AS 2 , inventories are those assets which are held for sale in the open market. Now I will come to your point. Can we recognise expired medicine as inventory. Basically it is classified as inventory as it can be sold in the market. However market value of such expired medicine is nil. So when we apply rule of measuring inventory at lower of cost or NRV as discussed in AS2 , we come to know that NRV of such expired medicine is near to zero except there may be some alternative option available. So we need to write off inventory balance by the amount of value of such expired medicine by debiting profit & loss account. I hope you will be clear. Any doubts are most appreciated. I will be happy to resolve your doubts Rgds Viral Patel 9033485216