Stock Valuation :Income Tax Section 145A and AS-2

Ramkrishna Mokashi (Chartered Accountant) (734 Points)

12 November 2008  

Dear All,

I am confused on one thing. Please help me.

AS-2 requires that stock should be valued at lower of cost or "NET REALISABLE VALUE";

Income tax act requires stock to be valued at lower of cost or "MARKET VALUE".

Net realisable value and market value are two different terms. So, what should be followed?