Eko Retailers Limited has the following inventory data at its year-end: Cost ₦350,000; Estimated selling price ₦380,000; Estimated costs to complete ₦35,000; Estimated selling costs ₦20,000. In accordance with IAS 2, at what value should the inventory be reported in the statement of financial position?

IAS 2 requires inventories to be measured at the lower of cost and net realisable value (NRV). NRV = Estimated selling price – Costs to complete – Selling costs = ₦380,000 – ₦35,000 – ₦20,000 = ₦325,000. Since NRV (₦325,000) is lower than cost (₦350,000), the inventory must be written down to ₦325,000. The write-down of ₦25,000 is recognised as an expense in profit or loss.