NANDURI RAVI SURYA NARAYANA MU (ACCOUNTANT) (194 Points)
14 August 2008Respected Sir/Madam
Any body please slove by doubt. Once manufacturing the item, it is finished goods. it that finished goods expires itself the godowns not send to any stockiest. What is the treatment of accounting.
For instance Medicines, FMCG items. Please clarify my doubt. Whether it is gone for development of expenses of assets side later it will be amortised.
Vidya
(Student)
(789 Points)
Replied 24 August 2008
These expired stock must not be considered while valuaing the closing/opening stock of the enterprise. This will result in automatic adjustment of the loss of stock due to expiry in the final profits of the entity and also set the balance sheet right. If these stock can be brought back to life by doing some modification/corrective treatment, then the stock can be brought back to valuation of closing/opening stock.
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