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If various batches of inventories have been purchased at different times during the year and at different prices, it may be impossible to determine precisely which items are still held at the year end and therefore what the actual purchase cost of the goods was. In such circumstances, the following estimation methods are allowed under IAS 2: a)  FIFO                                                                                      b) Weighted average cost:                                      Explain the above methods, that is (a and b) and give examples where necessary?

If various batches of inventories have been purchased at different times during the year and at different prices, it may be impossible to determine precisely which items are still held at the year end and therefore what the actual purchase cost of the goods was. In such circumstances, the following estimation methods are allowed under IAS 2: a)  FIFO                                                                                      b) Weighted average cost:                                      Explain the above methods, that is (a and b) and give examples where necessary?

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter7: Inventories: Cost Measurement And Flow Assumptions
Section: Chapter Questions
Problem 17GI
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If various batches of inventories have been purchased at different times during the year and at different prices, it may be impossible to determine precisely which items are still held at the year end and therefore what the actual purchase cost of the goods was. In such circumstances, the following estimation methods are allowed under IAS 2:

a)  FIFO                                                                                     

b) Weighted average cost: 

                                  

 Explain the above methods, that is (a and b) and give examples where necessary?                                                        

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