IFRS Notes

Lower of cost and net realisable value: IAS 2

Net realisable value (NRV) = (1) - (2)
(1) estimated selling price
(2) estimated costs of completion and sale

If net realisable value (NRV) < cost,
write down inventories to NRV.

If NRV recovers in the later period,
write-down is reversed.
The reversal cannot be greater than the original write-down.

The amount of reversal decreases
the amount of inventories recognised as an expense,
in the period when the reversal occurs.

When inventories are sold,
carrying amount of inventories is recognised as an expense.