Which of the following best describes the IFRS requirement for applying the same cost formula to all inventories?
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| When they are similar in nature or use. | | When they sell for the same price. | | When they are purchased from different suppliers. | | When they are purchased from the same geographic region | |
Answer: When they are similar in nature or use.
Explanation:
IAS2 requires that the same cost formula be used for all inventories that have similar characteristics as to their nature and use to the reporting entity.
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