What is the basic principle for measuring inventories in line with IAS 2?

The basic principle for measuring inventories in line with IAS2 is Inventories shall be measured at the lower of cost and net realizable value.

option no4 is the correct answer

Yes...Option4 is the right answer.

4th option is correct one.

According to Ias2 Inventories must be recognised lower of cost and NRV

NRV is Sales less cost to sell

answer no4------------------------------

No.4

And I would say the answer provided by Vimal Jose is perfect.

Inventory should be valued either book value or net realizable value, whichever is less.

4. Inventories shall be measured at the lower of cost and net realizable value.

As per IAS2: The inventories are should be measured at the “lower of cost and net realizable value”.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

The cost of inventoriesshall comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

(Other cost excludes abnormal wastage, storage cost, administrative over head, foreign exchange difference, interest cost when inventory purchased with differed payment.)

Cost Formula: The cost of inventories shall be assigned by using the first-in, first-out (FIFO) or weighted average cost formula. An entity shall use the same cost formula for all inventories having a similar nature and use to the entity.

As per IAS2 inventories shall be measured at lower of cost and at Net Realizable Value(NRV)

option #4