What are the objective and scope of Ind AS 2?

Ind AS 2, or the Indian Accounting Standard 2, sets out the accounting treatment for inventories in the context of preparing a company's financial statements. The objective of Ind AS 2 is to prescribe the measurement of inventories and the determination of the cost of inventory, as well as the subsequent recognition as an expense and the determination of its net realizable value. The scope of Ind AS 2 includes all inventories, except for work in progress arising under construction contracts, financial instruments, and biological assets related to agricultural activity. The standard aims to ensure that inventories are reported at the lower of cost and net realizable value in order to provide reliable and relevant information to users of financial statements.

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