Dear All
What should be the Value of Closing stock in the following case
I/P units 105units(Cost Rs. 10500)
F/G-100units.
MV Rs. 15000.
Assume no other Conversion Cost.
The loss of 5units is a normal loss of the process undertaken.
Now i am clear that as per AS-2 para 13 abnormal loss is to be excluded.
what about normal loss? Quote Relevant para of AS/CAS.
Naveen Chand Khulve
(CA)
(1521 Points)
Replied 24 March 2009
| Originally posted by :Vipul Garg | ||
| " |
Dear All
In this case value of Closing should be Rs 10500 (100Units). Since it is given that 5 units are Normal loss so it should be charged by good products. |
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Karuna
(CA Professional)
(196 Points)
Replied 24 March 2009
| Originally posted by :Naveen Chand Khulve | ||
| " |
stock is valued at cost and not at market value. |
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prashant
(enginnering)
(51 Points)
Replied 05 May 2009
In Case of Normal Loss We dont pass on the charge to the customer...if it will be suppose abnormal loss then the final output wil also be valued at 10
Anuraag Sharma
(Sr Executive Finance)
(845 Points)
Replied 07 May 2009
as per AS-2 value of Closing Stock should be Rs. 10,500 (100Units). Normal loss (5 units) should be charged by good products i.e. the cost of remaining goods ( input goods - normal loss )/Finished goods is to be increased by the amount of normal loss.
further as per AS-2 Closing stock is valued at cost or NRV whichever is lower not at the market value
so the cost of rs.10500 will be for 100 units(105 units - 5 units) and therefore, cost per unit will be rs 10.50.
CAclubindia
