Financial Reporting and Analysis Q238

0. A company which prepares its financial statements using IFRS wrote down its inventory value by €40,000 in 2011. In 2012, prices increased and the same inventory was worth €50,000 more than its value at the end of 2011. Which of the following statements is most accurate? In 2012, the company’s cost of sales:

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Option : B
Explanation : Under IFRS there will be reversal of the write-down. This reversal will be limited to 40,000. The reversal of the inventory write-down is recognized as a reduction in the cost of sales.

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