IAS 2 Transportation costs

[Asnake E]

Hi
I have one question
A company has imported inventory that was stored in one location. The import was before three years. But this year the company has transferred it (incurring material transportation costs) to another location for sale. Part of the transported items were sold and part remained on hand at the year end (30 June 2023). How should the company account for the transportation costs? part of the inventory cost (and as a result included in cost of goods sold for the items sold and ending inventory for the unsold items), selling expense?

[Ketan Marwah]

Hi,

The answer to your question is quite well explained here:

https://ifrscommunity.com/knowledge-bas ... tion-costs

[Asnake E]

Thank you.

"....relocating inventory between retail outlets to meet local demand, or transporting items from retail outlets to customer premises, is more likely to be categorised as selling activities and should therefore be expensed in P/L as incurred" What about the inventory items relocated still on hand at the year end?

[Marek Muc]

What was the reason these inventories were moved to different location?

PS. you'll notice that I changed this topic's title, please don't use generic titles like "IAS 2"

[Asnake E]

The location of the inventory changes due to demand conditions.

[Marek Muc]

So immediate recognition in P/L IMO (see the link that Ketan shared)

[Asnake E]

Thank you.
Though there are some inventory on hand after relocating to the new?

[Marek Muc]

The inventory stays in SoFP as usual, just don't add the transportation costs to their carrying amount

[Asnake E]

Thank you.