CERTYNEX IFRS ACADEMY

Câbleries du Rhône has a reporting date of 31 December 20X1. A batch of copper cables is held in inventory at a cost of 210,000; based on the price lists in force at the reporting date, its net realisable value was estimated at 230,000. On 20 January 20X2, before the financial statements are finalised, quality control discovers an insulation defect caused during manufacture and present before the reporting date; the batch is sold to a customer who accepts a discount, for an amount net of costs to sell of 185,000. Which measurement should be used at 31 December 20X1?

No write-down at 31 December 20X1: the information became known after the reporting date and only concerns 20X2.

A write-down of 25,000, bringing the batch down to 185,000.

A write-down of 45,000, equal to the difference between the initial estimate of 230,000 and the net price obtained.

A write-down of 25,000 recognised only in 20X2, the year in which the sale took place.