(e) The management of Redburn Co have told you that inventory is correctly valued at the lower of cost and net realisable value. You have already satisfied yourself that cost is correctly determined. Required: (i) Define net realisable value;
(e) (i) Net realisable value is defined in IAS 2 Inventories as: ‘the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.’
