Valuation of Goods, Accounting - Auditing

[sunil bandekar]

The raw material which is purchase is been used  to manufacture two finished products. Both the products require same material with only one raw material with lesser quantity and amount. How to value both the products at the end of the Year? Is the raw material purchased has to be bifurcated between two products at GRN level and maintain separately as stock OR can be taken into stock as it is and then issue as per requirement?

Please Suggest.  

 

Posts / Replies

[CA GOPALJI AGRAWAL]

Inventory has to be valued at lower of cost or net realisable value. Raw material is valued at cost unless the final products is expected to fetch the NRV lesser than cost. There is no need to bifurcate the raw material as such product qua.