Joint products and cost measurement techniques

• Production process and products obtained simultaneously (joint products, by-product)

  Text

• Common costs of the process up to the split-off point, not separately identifiable by product

  Number

  900,000

• Net realisable value of the immaterial by-product

  Number

  26,000

• Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3)

  Table

  PRODUCT_1 · BEAMS · 600,000 | PRODUCT_2 · PLANKS · 400,000

• Product whose allocated cost is detailed

  Choice

  Joint product 1

  Joint product 1 / Joint product 2 / Joint product 3

• Sales value of the inventory of the department

  Number

• Cost percentage of the sales value (100 − gross margin percentage retained)

  Number

  The gross margin percentage is the one appropriate to the department and takes into account items marked down below their original selling price; an average percentage for each department is often used (para. 22). The figure is a datum of the entity, never set by the standard.

• Inventories measured at standard cost

  Number

• Estimated actual cost, to assess how closely the result approximates cost

  Number

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IAS 2 §14

• Conditions for allocating joint costs

  Checklist

  • A single process produces more than one product simultaneously (joint products, or a main product and a by-product)
  • Costs of conversion of each product not separately identifiable
  • Allocation on a rational and consistent basis
  • Immaterial by-product measured at net realisable value, deducted from the cost of the main product

IAS 2 §21IAS 2 §22

• Conditions for using the techniques

  Checklist

  • Technique used for convenience, its results approximating cost
  • Standard costs based on normal levels of materials and supplies, labour, efficiency and capacity utilisation
  • Standard costs regularly reviewed and revised where necessary
  • Retail method: large numbers of rapidly changing items with similar margins
  • Gross margin percentage taking into account items marked down

IAS 2 §14IAS 2 §22

• Net realisable value of the by-product deducted from the common costs

  Calculation

  26,000

  Common costs of the process up to the split-off point, not separately identifiable by product ; Net realisable value of the immaterial by-product ; Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3) ; Product whose allocated cost is detailed

• Costs allocated to the joint products

  Calculation

  874,000

  Common costs of the process up to the split-off point, not separately identifiable by product ; Net realisable value of the immaterial by-product ; Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3) ; Product whose allocated cost is detailed

• Cost allocated to the product detailed

  Calculation

  524,400

  Common costs of the process up to the split-off point, not separately identifiable by product ; Net realisable value of the immaterial by-product ; Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3) ; Product whose allocated cost is detailed

  The engine first deducts the net realisable value of the by-product, then allocates the balance in proportion to the basis entered for each product. The row key must match the product chosen. The basis retained (relative sales value at the split-off point or at completion, for example) is a documented choice of the entity (para. 14). Calculation convention (teaching assumption): when there are several joint products, the net realisable value of the by-product is deducted from the common costs before allocation; para. 14 refers to the cost of the main product.

• Cost of inventories under the retail method

  Calculation

  Sales value of the inventory of the department ; Cost percentage of the sales value (100 − gross margin percentage retained)

• Gross margin deducted from the sales value

  Calculation

  Sales value of the inventory of the department ; Cost percentage of the sales value (100 − gross margin percentage retained)

IAS 2 §14IAS 2 §21IAS 2 §22

• Basis for allocating joint costs

  JudgmentRequired

  Relative sales value at the split-off point

  Relative sales value at the split-off point / Relative sales value at completion / Other rational and consistent basis, documented / Not applicable: no joint production

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Cost measurement technique retained

  JudgmentRequired

  Actual cost: technique rejected (results not approximating cost, or not used)

  Standard cost method, results approximating cost / Retail method, results approximating cost / Actual cost: technique rejected (results not approximating cost, or not used)

  The standard sets no numerical threshold for approximation: compare the result of the technique with the estimated actual cost and document the assessment (para. 21).

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The allocation basis is documentedPass
• The technique retained is documentedPass
• The common costs are fully allocated (by-product and joint products)Pass

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0

• Production process and products obtained simultaneously (joint products, by-product)

  Text

• Common costs of the process up to the split-off point, not separately identifiable by product

  Number

  900,000

• Net realisable value of the immaterial by-product

  Number

  26,000

• Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3)

  Table

  PRODUCT_1 · BEAMS · 600,000 | PRODUCT_2 · PLANKS · 400,000

• Product whose allocated cost is detailed

  Choice

  Joint product 2

  Joint product 1 / Joint product 2 / Joint product 3

• Sales value of the inventory of the department

  Number

• Cost percentage of the sales value (100 − gross margin percentage retained)

  Number

  The gross margin percentage is the one appropriate to the department and takes into account items marked down below their original selling price; an average percentage for each department is often used (para. 22). The figure is a datum of the entity, never set by the standard.

• Inventories measured at standard cost

  Number

• Estimated actual cost, to assess how closely the result approximates cost

  Number

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IAS 2 §14

• Conditions for allocating joint costs

  Checklist

  • A single process produces more than one product simultaneously (joint products, or a main product and a by-product)
  • Costs of conversion of each product not separately identifiable
  • Allocation on a rational and consistent basis
  • Immaterial by-product measured at net realisable value, deducted from the cost of the main product

IAS 2 §21IAS 2 §22

• Conditions for using the techniques

  Checklist

  • Technique used for convenience, its results approximating cost
  • Standard costs based on normal levels of materials and supplies, labour, efficiency and capacity utilisation
  • Standard costs regularly reviewed and revised where necessary
  • Retail method: large numbers of rapidly changing items with similar margins
  • Gross margin percentage taking into account items marked down

IAS 2 §14IAS 2 §22

• Net realisable value of the by-product deducted from the common costs

  Calculation

  26,000

  Common costs of the process up to the split-off point, not separately identifiable by product ; Net realisable value of the immaterial by-product ; Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3) ; Product whose allocated cost is detailed

• Costs allocated to the joint products

  Calculation

  874,000

  Common costs of the process up to the split-off point, not separately identifiable by product ; Net realisable value of the immaterial by-product ; Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3) ; Product whose allocated cost is detailed

• Cost allocated to the product detailed

  Calculation

  349,600

  Common costs of the process up to the split-off point, not separately identifiable by product ; Net realisable value of the immaterial by-product ; Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3) ; Product whose allocated cost is detailed

  The engine first deducts the net realisable value of the by-product, then allocates the balance in proportion to the basis entered for each product. The row key must match the product chosen. The basis retained (relative sales value at the split-off point or at completion, for example) is a documented choice of the entity (para. 14). Calculation convention (teaching assumption): when there are several joint products, the net realisable value of the by-product is deducted from the common costs before allocation; para. 14 refers to the cost of the main product.

• Cost of inventories under the retail method

  Calculation

  Sales value of the inventory of the department ; Cost percentage of the sales value (100 − gross margin percentage retained)

• Gross margin deducted from the sales value

  Calculation

  Sales value of the inventory of the department ; Cost percentage of the sales value (100 − gross margin percentage retained)

IAS 2 §14IAS 2 §21IAS 2 §22

• Basis for allocating joint costs

  JudgmentRequired

  Relative sales value at the split-off point

  Relative sales value at the split-off point / Relative sales value at completion / Other rational and consistent basis, documented / Not applicable: no joint production

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Cost measurement technique retained

  JudgmentRequired

  Actual cost: technique rejected (results not approximating cost, or not used)

  Standard cost method, results approximating cost / Retail method, results approximating cost / Actual cost: technique rejected (results not approximating cost, or not used)

  The standard sets no numerical threshold for approximation: compare the result of the technique with the estimated actual cost and document the assessment (para. 21).

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The allocation basis is documentedPass
• The technique retained is documentedPass
• The common costs are fully allocated (by-product and joint products)Pass

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0

• Production process and products obtained simultaneously (joint products, by-product)

  Text

• Common costs of the process up to the split-off point, not separately identifiable by product

  Number

• Net realisable value of the immaterial by-product

  Number

• Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3)

  Table

• Product whose allocated cost is detailed

  Choice

  Joint product 1 / Joint product 2 / Joint product 3

• Sales value of the inventory of the department

  Number

  250,000

• Cost percentage of the sales value (100 − gross margin percentage retained)

  Number

  60 %

  The gross margin percentage is the one appropriate to the department and takes into account items marked down below their original selling price; an average percentage for each department is often used (para. 22). The figure is a datum of the entity, never set by the standard.

• Inventories measured at standard cost

  Number

• Estimated actual cost, to assess how closely the result approximates cost

  Number

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IAS 2 §14

• Conditions for allocating joint costs

  Checklist

  • A single process produces more than one product simultaneously (joint products, or a main product and a by-product)
  • Costs of conversion of each product not separately identifiable
  • Allocation on a rational and consistent basis
  • Immaterial by-product measured at net realisable value, deducted from the cost of the main product

IAS 2 §21IAS 2 §22

• Conditions for using the techniques

  Checklist

  • Technique used for convenience, its results approximating cost
  • Standard costs based on normal levels of materials and supplies, labour, efficiency and capacity utilisation
  • Standard costs regularly reviewed and revised where necessary
  • Retail method: large numbers of rapidly changing items with similar margins
  • Gross margin percentage taking into account items marked down

IAS 2 §14IAS 2 §22

• Net realisable value of the by-product deducted from the common costs

  Calculation

  Common costs of the process up to the split-off point, not separately identifiable by product ; Net realisable value of the immaterial by-product ; Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3) ; Product whose allocated cost is detailed

• Costs allocated to the joint products

  Calculation

  Common costs of the process up to the split-off point, not separately identifiable by product ; Net realisable value of the immaterial by-product ; Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3) ; Product whose allocated cost is detailed

• Cost allocated to the product detailed

  Calculation

  Common costs of the process up to the split-off point, not separately identifiable by product ; Net realisable value of the immaterial by-product ; Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3) ; Product whose allocated cost is detailed

  The engine first deducts the net realisable value of the by-product, then allocates the balance in proportion to the basis entered for each product. The row key must match the product chosen. The basis retained (relative sales value at the split-off point or at completion, for example) is a documented choice of the entity (para. 14). Calculation convention (teaching assumption): when there are several joint products, the net realisable value of the by-product is deducted from the common costs before allocation; para. 14 refers to the cost of the main product.

• Cost of inventories under the retail method

  Calculation

  150,000

  Sales value of the inventory of the department ; Cost percentage of the sales value (100 − gross margin percentage retained)

• Gross margin deducted from the sales value

  Calculation

  100,000

  Sales value of the inventory of the department ; Cost percentage of the sales value (100 − gross margin percentage retained)

IAS 2 §14IAS 2 §21IAS 2 §22

• Basis for allocating joint costs

  JudgmentRequired

  Not applicable: no joint production

  Relative sales value at the split-off point / Relative sales value at completion / Other rational and consistent basis, documented / Not applicable: no joint production

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Cost measurement technique retained

  JudgmentRequired

  Retail method, results approximating cost

  Standard cost method, results approximating cost / Retail method, results approximating cost / Actual cost: technique rejected (results not approximating cost, or not used)

  The standard sets no numerical threshold for approximation: compare the result of the technique with the estimated actual cost and document the assessment (para. 21).

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The allocation basis is documentedPass
• The technique retained is documentedPass
• The common costs are fully allocated (by-product and joint products)Not evaluated

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0

• Production process and products obtained simultaneously (joint products, by-product)

  Text

• Common costs of the process up to the split-off point, not separately identifiable by product

  Number

• Net realisable value of the immaterial by-product

  Number

• Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3)

  Table

• Product whose allocated cost is detailed

  Choice

  Joint product 1 / Joint product 2 / Joint product 3

• Sales value of the inventory of the department

  Number

  180,000

• Cost percentage of the sales value (100 − gross margin percentage retained)

  Number

  70 %

  The gross margin percentage is the one appropriate to the department and takes into account items marked down below their original selling price; an average percentage for each department is often used (para. 22). The figure is a datum of the entity, never set by the standard.

• Inventories measured at standard cost

  Number

• Estimated actual cost, to assess how closely the result approximates cost

  Number

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IAS 2 §14

• Conditions for allocating joint costs

  Checklist

  • A single process produces more than one product simultaneously (joint products, or a main product and a by-product)
  • Costs of conversion of each product not separately identifiable
  • Allocation on a rational and consistent basis
  • Immaterial by-product measured at net realisable value, deducted from the cost of the main product

IAS 2 §21IAS 2 §22

• Conditions for using the techniques

  Checklist

  • Technique used for convenience, its results approximating cost
  • Standard costs based on normal levels of materials and supplies, labour, efficiency and capacity utilisation
  • Standard costs regularly reviewed and revised where necessary
  • Retail method: large numbers of rapidly changing items with similar margins
  • Gross margin percentage taking into account items marked down

IAS 2 §14IAS 2 §22

• Net realisable value of the by-product deducted from the common costs

  Calculation

  Common costs of the process up to the split-off point, not separately identifiable by product ; Net realisable value of the immaterial by-product ; Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3) ; Product whose allocated cost is detailed

• Costs allocated to the joint products

  Calculation

  Common costs of the process up to the split-off point, not separately identifiable by product ; Net realisable value of the immaterial by-product ; Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3) ; Product whose allocated cost is detailed

• Cost allocated to the product detailed

  Calculation

  Common costs of the process up to the split-off point, not separately identifiable by product ; Net realisable value of the immaterial by-product ; Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3) ; Product whose allocated cost is detailed

  The engine first deducts the net realisable value of the by-product, then allocates the balance in proportion to the basis entered for each product. The row key must match the product chosen. The basis retained (relative sales value at the split-off point or at completion, for example) is a documented choice of the entity (para. 14). Calculation convention (teaching assumption): when there are several joint products, the net realisable value of the by-product is deducted from the common costs before allocation; para. 14 refers to the cost of the main product.

• Cost of inventories under the retail method

  Calculation

  126,000

  Sales value of the inventory of the department ; Cost percentage of the sales value (100 − gross margin percentage retained)

• Gross margin deducted from the sales value

  Calculation

  54,000

  Sales value of the inventory of the department ; Cost percentage of the sales value (100 − gross margin percentage retained)

IAS 2 §14IAS 2 §21IAS 2 §22

• Basis for allocating joint costs

  JudgmentRequired

  Not applicable: no joint production

  Relative sales value at the split-off point / Relative sales value at completion / Other rational and consistent basis, documented / Not applicable: no joint production

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Cost measurement technique retained

  JudgmentRequired

  Retail method, results approximating cost

  Standard cost method, results approximating cost / Retail method, results approximating cost / Actual cost: technique rejected (results not approximating cost, or not used)

  The standard sets no numerical threshold for approximation: compare the result of the technique with the estimated actual cost and document the assessment (para. 21).

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The allocation basis is documentedPass
• The technique retained is documentedPass
• The common costs are fully allocated (by-product and joint products)Not evaluated

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0

• Production process and products obtained simultaneously (joint products, by-product)

  Text

• Common costs of the process up to the split-off point, not separately identifiable by product

  Number

  1,356,000

• Net realisable value of the immaterial by-product

  Number

  24,000

• Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3)

  Table

  PRODUCT_1 · APPLE_JUICE · 1,398,600 | PRODUCT_2 · APPLE_COMPOTE · 932,400

• Product whose allocated cost is detailed

  Choice

  Joint product 1

  Joint product 1 / Joint product 2 / Joint product 3

• Sales value of the inventory of the department

  Number

• Cost percentage of the sales value (100 − gross margin percentage retained)

  Number

  The gross margin percentage is the one appropriate to the department and takes into account items marked down below their original selling price; an average percentage for each department is often used (para. 22). The figure is a datum of the entity, never set by the standard.

• Inventories measured at standard cost

  Number

• Estimated actual cost, to assess how closely the result approximates cost

  Number

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IAS 2 §14

• Conditions for allocating joint costs

  Checklist

  • A single process produces more than one product simultaneously (joint products, or a main product and a by-product)
  • Costs of conversion of each product not separately identifiable
  • Allocation on a rational and consistent basis
  • Immaterial by-product measured at net realisable value, deducted from the cost of the main product

IAS 2 §21IAS 2 §22

• Conditions for using the techniques

  Checklist

  • Technique used for convenience, its results approximating cost
  • Standard costs based on normal levels of materials and supplies, labour, efficiency and capacity utilisation
  • Standard costs regularly reviewed and revised where necessary
  • Retail method: large numbers of rapidly changing items with similar margins
  • Gross margin percentage taking into account items marked down

IAS 2 §14IAS 2 §22

• Net realisable value of the by-product deducted from the common costs

  Calculation

  24,000

  Common costs of the process up to the split-off point, not separately identifiable by product ; Net realisable value of the immaterial by-product ; Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3) ; Product whose allocated cost is detailed

• Costs allocated to the joint products

  Calculation

  1,332,000

  Common costs of the process up to the split-off point, not separately identifiable by product ; Net realisable value of the immaterial by-product ; Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3) ; Product whose allocated cost is detailed

• Cost allocated to the product detailed

  Calculation

  799,200

  Common costs of the process up to the split-off point, not separately identifiable by product ; Net realisable value of the immaterial by-product ; Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3) ; Product whose allocated cost is detailed

  The engine first deducts the net realisable value of the by-product, then allocates the balance in proportion to the basis entered for each product. The row key must match the product chosen. The basis retained (relative sales value at the split-off point or at completion, for example) is a documented choice of the entity (para. 14). Calculation convention (teaching assumption): when there are several joint products, the net realisable value of the by-product is deducted from the common costs before allocation; para. 14 refers to the cost of the main product.

• Cost of inventories under the retail method

  Calculation

  Sales value of the inventory of the department ; Cost percentage of the sales value (100 − gross margin percentage retained)

• Gross margin deducted from the sales value

  Calculation

  Sales value of the inventory of the department ; Cost percentage of the sales value (100 − gross margin percentage retained)

IAS 2 §14IAS 2 §21IAS 2 §22

• Basis for allocating joint costs

  JudgmentRequired

  Relative sales value at completion

  Relative sales value at the split-off point / Relative sales value at completion / Other rational and consistent basis, documented / Not applicable: no joint production

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Cost measurement technique retained

  JudgmentRequired

  Actual cost: technique rejected (results not approximating cost, or not used)

  Standard cost method, results approximating cost / Retail method, results approximating cost / Actual cost: technique rejected (results not approximating cost, or not used)

  The standard sets no numerical threshold for approximation: compare the result of the technique with the estimated actual cost and document the assessment (para. 21).

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The allocation basis is documentedPass
• The technique retained is documentedPass
• The common costs are fully allocated (by-product and joint products)Pass

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0

• Production process and products obtained simultaneously (joint products, by-product)

  Text

• Common costs of the process up to the split-off point, not separately identifiable by product

  Number

  1,356,000

• Net realisable value of the immaterial by-product

  Number

  24,000

• Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3)

  Table

  PRODUCT_1 · APPLE_JUICE · 1,398,600 | PRODUCT_2 · APPLE_COMPOTE · 932,400

• Product whose allocated cost is detailed

  Choice

  Joint product 2

  Joint product 1 / Joint product 2 / Joint product 3

• Sales value of the inventory of the department

  Number

• Cost percentage of the sales value (100 − gross margin percentage retained)

  Number

  The gross margin percentage is the one appropriate to the department and takes into account items marked down below their original selling price; an average percentage for each department is often used (para. 22). The figure is a datum of the entity, never set by the standard.

• Inventories measured at standard cost

  Number

• Estimated actual cost, to assess how closely the result approximates cost

  Number

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IAS 2 §14

• Conditions for allocating joint costs

  Checklist

  • A single process produces more than one product simultaneously (joint products, or a main product and a by-product)
  • Costs of conversion of each product not separately identifiable
  • Allocation on a rational and consistent basis
  • Immaterial by-product measured at net realisable value, deducted from the cost of the main product

IAS 2 §21IAS 2 §22

• Conditions for using the techniques

  Checklist

  • Technique used for convenience, its results approximating cost
  • Standard costs based on normal levels of materials and supplies, labour, efficiency and capacity utilisation
  • Standard costs regularly reviewed and revised where necessary
  • Retail method: large numbers of rapidly changing items with similar margins
  • Gross margin percentage taking into account items marked down

IAS 2 §14IAS 2 §22

• Net realisable value of the by-product deducted from the common costs

  Calculation

  24,000

  Common costs of the process up to the split-off point, not separately identifiable by product ; Net realisable value of the immaterial by-product ; Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3) ; Product whose allocated cost is detailed

• Costs allocated to the joint products

  Calculation

  1,332,000

  Common costs of the process up to the split-off point, not separately identifiable by product ; Net realisable value of the immaterial by-product ; Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3) ; Product whose allocated cost is detailed

• Cost allocated to the product detailed

  Calculation

  532,800

  Common costs of the process up to the split-off point, not separately identifiable by product ; Net realisable value of the immaterial by-product ; Joint products and allocation basis (one row per product, key PRODUCT_1, PRODUCT_2 or PRODUCT_3) ; Product whose allocated cost is detailed

  The engine first deducts the net realisable value of the by-product, then allocates the balance in proportion to the basis entered for each product. The row key must match the product chosen. The basis retained (relative sales value at the split-off point or at completion, for example) is a documented choice of the entity (para. 14). Calculation convention (teaching assumption): when there are several joint products, the net realisable value of the by-product is deducted from the common costs before allocation; para. 14 refers to the cost of the main product.

• Cost of inventories under the retail method

  Calculation

  Sales value of the inventory of the department ; Cost percentage of the sales value (100 − gross margin percentage retained)

• Gross margin deducted from the sales value

  Calculation

  Sales value of the inventory of the department ; Cost percentage of the sales value (100 − gross margin percentage retained)

IAS 2 §14IAS 2 §21IAS 2 §22

• Basis for allocating joint costs

  JudgmentRequired

  Relative sales value at completion

  Relative sales value at the split-off point / Relative sales value at completion / Other rational and consistent basis, documented / Not applicable: no joint production

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Cost measurement technique retained

  JudgmentRequired

  Actual cost: technique rejected (results not approximating cost, or not used)

  Standard cost method, results approximating cost / Retail method, results approximating cost / Actual cost: technique rejected (results not approximating cost, or not used)

  The standard sets no numerical threshold for approximation: compare the result of the technique with the estimated actual cost and document the assessment (para. 21).

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The allocation basis is documentedPass
• The technique retained is documentedPass
• The common costs are fully allocated (by-product and joint products)Pass

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0