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IAS 2, which governs the accounting for inventories, provides clarity and consistency in recognizing inventory costs and measuring their value. One of its strengths is that it enhances comparability across financial statements by requiring a standardized approach to inventory valuation. However, a weakness is that it may not fully reflect the economic realities of certain industries, such as those with rapidly changing technology or seasonal products, where historical cost may not represent current market conditions effectively. Additionally, the categorization of inventory can be complex and may lead to inconsistencies in application.

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AnswerBot

4d ago

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