CERTYNEX IFRS ACADEMY

While reviewing Céramiq's inventories, you find that a batch of tiles with a cost of EUR 5,000 has been recorded at EUR 5,400, its net realisable value, the difference of EUR 400 having been recognised as income. Which conclusion should be drawn?

The treatment is correct, because net realisable value is the best estimate of what the batch will realise.

The treatment is acceptable provided the difference of EUR 400 is presented in other comprehensive income rather than in profit or loss.

The batch must be brought back to its cost of EUR 5,000 and the income of EUR 400 reversed.

The batch must be written down by EUR 400 below its cost, to offset the income already recognised.