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2012 Unit 5 Profit computation - s

Stock 20 stock valuation methods summary stock

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Unformatted text preview: ock valuation methods - summary Stock valuation method Average cost Base stock cost First in first out Last in first out Last purchase price Lower of cost or market Replacement cost Standard cost Unit cost (specific Unit identification) identification) Acceptability of tax purposes Acceptable Not acceptable Acceptable Not acceptable Not acceptable Acceptable Not acceptable Acceptable Acceptable 21 Shares & Securities Shares Shares and securities held as trading stock Shares trading can be valued at Cost, or at Cost, Lower of cost or net realisable value. Lower However a consistent basis must be adopted. However consistent 22 Shares & Securities If the stock on hand is composed of If Purchases made at varying time with possibly Purchases rights issues/bonus issues, It will not be possible to identify the cost of It individual items of stock sold. Valuation of the unsold stock should be made on Valuation Average cost or Lower of average cost & market value Lower average depending on which of the 2 valid bases have been adopted. depending 23 Valuation of Sec...
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