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Is it good to create financial provision for aged stock from start of new fiscal year?

Inventory Valuation Accounting Auditing Cost Accounting Financial Accounting
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Question added by Umair Habib , Inventory Controller , Landmark Group
Date Posted: 2015/02/07
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Muhammad Naqi Mohsin
by Muhammad Naqi Mohsin , Manager Internal Audit , BANK AL HABIB LIMITED

Dear Mr. Habib

 

At any point of Time, Inventory should be recorded at lower of cost or NRV.  And according to IAS2 para30

"Estimates of net realisable value are based on the most reliable evidence available

at the time the estimates are made".

Therefore, there is no need of provision in the book of account related to inventory.

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