Forums
Back
Consignment
Accountancy
In illustration 1, the inventory valuation has no insurance charge. But in the illustration 3, the inventory valuation has insurance. Which one is correct? Should we include the insurance cost or not in the inventory valuation?
Answers (7)
Rishi Kumar
In illustration 1 consignee paid the insurance In illustration 3 consignor paid the insurance
Ok, bro. But insurance paid by consignee is for consignor right. Then why we didn't include that in illustration 1.
Perfect answer Valuation of inventories 6.56 page Expenses incurred after the goods have reached the consignee`s godown (such as godown rent, insurance of godown are not treated as part of the cost of valuation inventories Once read the NOTE in page no 6.56 In illustration 1 consignee incurred the expenses of insurance so not included in inventory valuation account