BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Under both IFRS and US GAAP, the costs that are excluded from inventory include abnormal costs that are incurred as a result of material waste, labor or other production conversion inputs, storage costs (unless required as part of the production process), and all administrative overhead and selling costs.

Detailed explanation-2: -The cost of inventory includes the cost of purchased merchandise, less discounts that are taken, plus any duties and transportation costs paid by the purchaser.

Detailed explanation-3: -Inventory includes Raw material, semi finished goods and finished products. So, here consumer goods which are sold to the households during the accounting year will not be included in inventory.

Detailed explanation-4: -28 The cost of inventories may not be recoverable if those inventories are damaged, if they have become wholly or partially obsolete, or if their selling prices have declined.