Friday, July 14, 2017

ICDS 2 vs. AS 2

The corresponding AS to ICDS 2 'Valuation of Inventories' is AS 2 'Valuation of Inventories'

Point of Difference

AS - 2
ICDS - 2
Valuation of inventory

Actual Cost - Standard cost method OR
Retail method

Standard cost method not allowed.
Change in method of valuation

Allowed if it would result in more appropriate presentation No change allowed until there is a reasonable cause
Opening inventory

Continuing business - value shall be same as the value of closing inventory at the end of immediately preceeding financial year.
New business - value of opening inventory shall be NIL
Continuing Business - same as of AS 2
New business- value of opening inventory shall be cost of inventory available on the date of commencement of business.

Does not include work in progress arising in the ordinary course of business of service providers Specifies that it doesnt apply to WIP which is dealt with by other ICDS.