Under IAS 2 inventories, which of the following must be disclosed?

Under IAS 2 inventories, which of the following must be disclosed?

• A. All of the above
• B. Total carrying amount, split into raw materials, work in progress and finished goods
• C. Details of circumstances that have led to a write down of inventories to NRV
• D. Accounting policies adopted including the cost formula used

Answer: (D)

Under IAS 2, you must disclose the accounting policies used for measuring inventories, including the cost formula adopted to assign costs to inventories. This choice directly reflects what the standard requires to ensure users understand how inventory values are determined and can compare across periods and entities. The cost formula (such as FIFO or weighted average) can significantly affect reported cost of goods sold and closing inventory, so stating the policy is essential. While IAS 2 also requires disclosures about carrying amounts and NRV write-downs, it does not compel the specific presentations described in the other options; it emphasizes the policy itself as a mandatory disclosure.

Under IAS 2, you must disclose the accounting policies used for measuring inventories, including the cost formula adopted to assign costs to inventories. This choice directly reflects what the standard requires to ensure users understand how inventory values are determined and can compare across periods and entities. The cost formula (such as FIFO or weighted average) can significantly affect reported cost of goods sold and closing inventory, so stating the policy is essential. While IAS 2 also requires disclosures about carrying amounts and NRV write-downs, it does not compel the specific presentations described in the other options; it emphasizes the policy itself as a mandatory disclosure.