In this chapter the students will learn: 

2.1 State the nature of inventory under MFRS 102 

(MPERS: Section 13)  

2.1.1 Define inventories  

2.1.2 Identify the category of inventories   

2.2 Discuss the recognition and measurement of inventories.  

 2.2.1 Give the definition of cost, net realizable value and cost of conversion 

2.2.2 Explain the basis of the valuation of inventory at the lower of cost and net realizable value 

2.3 Compute the measurement of profit and value of closing inventories

 2.3.1 Explain the periodic inventory system and perpetual inventory system 

2.3.2 Explain the cost formulas used: first in first out (FIFO) method and weighted average method 

2.3.3 Compute the value of closing inventory using the systems and methods 

2.3.4  Identify the effects of inventory valuation methods on the profitability 

2.4 Show the presentation of inventories in Financial Statements