CAT / FIA FFA Syllabus D. Recording Transactions And Events - Disclosure notes - Notes ^{10 / 10}

Disclosure note for inventory

The financial statements should disclose the following: -

• accounting policy for inventories

• carrying amount, generally classified as merchandise, supplies, materials, work in progress, and finished goods. The classifications depend on what is appropriate for the entity

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

• amount of any write-down of inventories recognised as an expense in the period

Example of disclosure note

• Note 1: Accounting Policies 

  Inventories

  Inventories are valued at the lower of cost and net realizable value. Cost is determined using first in, first out method.  Net realizable value is the estimated selling price in the ordinary course of business, less the costs estimated to make the sale.

• Note 10: Inventories