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WorkpaperIAS 2 — InventoriesL2 · L3 · L4

Inventories note

2 missions7 sections to document30 min
Prepared by
AI-assisted draft
Reviewed by
Not reviewed — human review required
Status
Published

Objective of the workpaper

Reconcile the amount of inventories recognised as an expense with the movement in inventories, taking into account unallocated overheads, abnormal amounts, write-downs and reversals, then prepare the complete inventories note.

7 sections · 22 blocks · 2 calculations · 0 entries

  • IAS 2 §34
  • IAS 2 §35
  • IAS 2 §36
  • IAS 2 §37
  • IAS 2 §38

Work this workpaper as a mission

Each case that uses this template opens in the mission workspace: data, analysis, calculation, entries, conclusion and review, with your progress saved.

2 instances from the cases: the calculations and entries below are run by the calculation engine.

File and entity
Group inventory review: scope, cost formulas, transfer to property, plant and equipment and disclosures
Case tasks documented here
  • Calculate the corrected closing inventories, the cost of inventories sold and the amount of inventories recognised as an expense.
  • Which information do you present in the note on inventories?
1

Inputs

Inputs

  • Accounting policies for measuring inventories, including the cost formulas

    TextRequired

  • Carrying amount by classification appropriate to the entity

    TableRequired

    MERCHANDISE · 1,200,000 | MATERIALS · 900,000 | WORK_IN_PROGRESS · 650,000 | FINISHED_GOODS · 1,150,000

    Common classifications mentioned by the standard; the entity uses those appropriate to it (para. 37).

  • Carrying amount at the beginning of the period of inventories measured under the measurement requirements of IAS 2 (excluding inventories at fair value less costs to sell)

    NumberRequired

    2,400,000

  • Costs capitalised in inventories in the period (purchases and production)

    NumberRequired

    9,600,000

  • Carrying amount at the end of the period of inventories measured under the measurement requirements of IAS 2, after write-downs (excluding inventories at fair value less costs to sell)

    NumberRequired

    2,700,000

  • Inventories allocated to other asset accounts (self-constructed property, plant and equipment)

    Number

    85,000

  • Unallocated production overheads of the period

    Number

    120,000

  • Abnormal amounts of production costs

    Number

    35,000

  • Other amounts included as the entity's circumstances warrant (distribution costs, for example)

    Number

  • Write-downs recognised as an expense in the period

    Number

    0

  • Reversals of write-downs in the period

    Number

    0

  • Circumstances or events that led to the reversals

    Text

  • Carrying amount of inventories carried at fair value less costs to sell

    Number

    1,200,000

  • Carrying amount of inventories pledged as security for liabilities

    Number

    300,000

  • Amount of inventories recognised as an expense per the trial balance

    Number

    9,370,000

2

Supporting evidence

Evidence

  • Evidence obtained and referenced (category, document reference)

    EvidenceRequired

3

Amount recognised as an expense

Analysis

IAS 2 §34IAS 2 §35IAS 2 §38

  • Components of the amount of inventories recognised as an expense

    ChecklistRequired

    • Costs previously included in the inventories sold, expensed in the period of the related revenue
    • Write-downs and losses of inventories expensed in the period they occur
    • Reversals recognised as a reduction in the amount of inventories recognised as an expense in the period of the reversal
    • Inventories allocated to other asset accounts: expensed over the useful life of those assets
    • Unallocated production overheads and abnormal amounts of production costs included
    • Other amounts, such as distribution costs, where the entity's circumstances warrant
4

Reconciliation of the amount recognised as an expense

Calculations

IAS 2 §34IAS 2 §36IAS 2 §38

  • Costs released from inventories (opening + costs capitalised − closing − allocations to other assets)

    CalculationRequired

    9,215,000

    Carrying amount at the beginning of the period of inventories measured under the measurement requirements of IAS 2 (excluding inventories at fair value less costs to sell) ; Costs capitalised in inventories in the period (purchases and production) ; − Carrying amount at the end of the period of inventories measured under the measurement requirements of IAS 2, after write-downs (excluding inventories at fair value less costs to sell) ; − Inventories allocated to other asset accounts (self-constructed property, plant and equipment)

    As opening and closing inventories are entered at their carrying amount, this amount includes the write-downs of the period net of reversals (para. 34), which are also disclosed separately in the note (para. 36).

  • Amount of inventories recognised as an expense during the period

    CalculationRequired

    9,370,000

    Costs released from inventories (opening + costs capitalised − closing − allocations to other assets) ; Unallocated production overheads of the period ; Abnormal amounts of production costs ; Other amounts included as the entity's circumstances warrant (distribution costs, for example)

5

Conclusion

Conclusion

  • Inventories note complete and amount recognised as an expense reconciled

    ConclusionRequired

6

Inventories note

Disclosure

IAS 2 §34IAS 2 §36IAS 2 §37IAS 2 §38

  • Disclosures

    ChecklistRequired

    • Accounting policies adopted in measuring inventories, including the cost formula used
    • Total carrying amount and carrying amount in classifications appropriate to the entity
    • Carrying amount of inventories carried at fair value less costs to sell
    • Amount of inventories recognised as an expense during the period
    • Amount of any write-down recognised as an expense
    • Amount of any reversal recognised as a reduction of that expense
    • Circumstances or events that led to the reversals
    • Carrying amount of inventories pledged as security for liabilities
7

Normative references

References

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

    References

8

Checks and financial statement impact

  • The amount recognised as an expense is determinedPass
  • The amount recalculated agrees with the trial balancePass
  • The accounting policies are describedNot filled in this instance
Assets
0
Liabilities
0
Profit or loss
0
OCI
0
Equity
0