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Essay text:
These estimates are based on the most reliable evidence at the time the estimates are made. The purpose for which the inventory is held should be taken into account at the time of the estimate. Inventories are usually written down to NRV based on the following principles:
• Items are treated on an item-by-item basis.
• Similar items are normally grouped together.
• Each service is treated as a separate item.
4.7 IAS 2 does not apply to the following inventory assets which are covered by other standards:
• work in progress under construction contracts.
• financial instruments.
• biological assets related to agricultural activity and agricultural produce at the point of harvest...
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