Difference between Ind AS 2 and AS 2

• Measurement requirements of Ind AS 2 does not apply to inventories held by commodity broker –traders who measure their inventory at fair value less costs to sell whereas no similar exemption is available under AS 2.

• Difference between the purchase price of inventories for normal credit terms and amount paid for deferred settlement terms is recognized as interest expense. Whereas, there is no specific guidance available under existing AS 2 on inventories purchased on deferred settlement terms.

•  Entity is required to use the same cost formulae for all inventories having similar nature and use to the entity whereas under AS 2, it is not expressly mandated to use the same cost formulae for all inventories that have a similar nature and use to the entity.

• Reversal of written down of inventory is possible under Ind AS , if circumstances that leads to the reversal no longer exist or net realisable value increases as a result of changes in economic circumstances. Under existing AS, no specific guidance exists for reversal.