CERTYNEX IFRS ACADEMY

Cupronor buys and sells copper on its own account. Its purchases aim at resale in the near future to generate a profit from price fluctuations, and it measures its inventories at fair value less costs to sell. At the reporting date, that value has increased by EUR 40,000 since acquisition. Which treatment applies under IAS 2?

The inventories remain within the scope of IAS 2 but are outside its measurement requirements; the EUR 40,000 increase is recognised in profit or loss for the period.

The inventories are entirely outside the scope of IAS 2; the EUR 40,000 increase is taken directly to equity.

The inventories must be measured at the lower of cost and net realisable value; the EUR 40,000 increase is not recognised.

The inventories are subject to all the requirements of IAS 2, and the EUR 40,000 increase, observed at the reporting date, is recognised in other comprehensive income for the period.