The write down of inventories to net realisable value in a prior period:
A) can be reversed in a later period with no upper limit from a previous write down.
B) cannot be reversed in a later period..
C) can be reversed in a later period but only to the upper limit of the original write down.
D) can be reversed in a later period so long as the value is recovered within 2 years of the original write down.

Question

Quizplus · Accepted Answer

According to IAS 2, any write down of inventories to net realisable value should be reversed when the circumstances that caused it no longer exist. The reversal should be limited to the amount of the original write down. Therefore, choice C is correct. Choices A, B, and D are incorrect as they do not align with the requirements of the accounting standard.

The Write Down of Inventories to Net Realisable Value in a Prior