State Company manufactured a forklift machine at a cost of $60,000. The product is sold for $66,000 at a 5% discount. The delivery costs are estimated to be $6,000. Under IFRS, how much should be the carrying amount of this inventory?
To determine the carrying amount of the inventory under IFRS (International Financial Reporting Standards), we need to consider the costs directly attributable to acquiring or producing the inventory and bringing it to its present location and condition.
In this case, the costs directly attributable to acquiring or producing the forklift machine include:
1. Manufacturing cost: $60,000
2. Delivery costs: $6,000
To calculate the carrying amount, we need to deduct any discounts or rebates from the selling price. In this case, the forklift is sold for $66,000 with a 5% discount.
Discount amount = 5% of $66,000 = $3,300
Selling price after discount = $66,000 - $3,300 = $62,700
Therefore, the carrying amount of the inventory under IFRS would be:
Manufacturing cost + Delivery costs - Discounts
= $60,000 + $6,000 - $3,300
= $62,700
Hence, the carrying amount of this inventory, under IFRS, would be $62,700.