International Accounting Standard 2 - Inventories and Czech Accounting Legislation

Abstract

ABSTRAKTCílem předkládaného příspěvku je hodnotícím způsobem charakterizovat základní požadavky IAS 2 -Zásoby na vymezení, oceňování a vykazování té části zásob, která je předmětem jeho řešení, srovnat je s obdobnými požadavky české legislativy a národních účetních standardů a dát náměty jednak na úpravu účetní legislativy do budoucna, jednak na řešení některých otázek, přesahujících rámec legislativního řešení, v rámci národních účetních standardů, popř. jejich interpretací.Článek dochází k závěru, že IAS 2 -Zásoby je v řadě rysů respektován a aplikován i v naší účetní legislativě. V některých částech však inspiruje k jejímu zpřesnění, a to jak v oblasti pojmové, tak i obsahové a metodické. Příspěvek v této souvislosti navrhuje celkem sedm změn ve vymezení a oceňování zásob, které by měly být do české účetní legislativy, standardů nebo jejich interpretací zapracovány.Klíčová slova: Zásoby; Vymezení zásob; Oceňování zásob; Vykazování informací o zásobách. International Accounting Standard 2 -Inventories and Czech Accounting Legislation ABSTRACTThe aim of the submitted article is to describe on the basis of evaluation basis principle requirements of IAS 2 -Inventories for definition, valuation a disclosure of this part of inventories which is the subject of its solution, to compare them with the analogical requirements of the Czech accounting legislation and national accounting standards and submit suggestions for the update of the Czech accounting legislation and standards for a future.The article concludes that IAS 2 -Inventories is in many regards respected and applied also in the Czech accounting legislation. The standard, however, brings some inspirations to its precision -especially in the substance, terminology and methodology. In this regard, the paper suggest seven changes in definition and valuation of inventories which should be incorporated into the Czech accounting legislation, into the Czech standards or their interpretations.

The Enactment and Critique of International Accounting Standard Two

“…Furthermore, the gap of application is asserted to mislead financial statements readers (Daraghma, 2018) defeating the International Accounting Standard Board (IASB) objective to "develop in the public interest, a single set of high quality, understandable, enforceable and globally accepted financial standards that are based on clearly articulated principles which accord transparency, comparability and quality information in other to aided stakeholders. Previous studies also echo the same sentiments on the poor application of IAS 2 prescription (Al-Daoor, 2008;Obaidat and Al-Hajaia, 2013;Asiri, 2014;Kral, 2014;Onyekwelu, 2014;Daraghma, 2018).…”

“…One of such dilemmas confronting the IAS 2 application globally is the employment of diverse inventory valuation methods (Al-Daoor, 2008;Shusheng, 2014;Monea, 2011;Siyanbola, 2012;Obaidat and Al-Hajaia, 2013;Asiri, 2014;Kral, 2014;Onyekwelu, 2014;Daraghma, 2018). Extant studies reveal the various methods afforded by the IAS 2 for the valuation of inventories (Al-Daoor, 2008;Shusheng, 2014;Monea, 2011;Siyanbola, 2012;Obaidat and Al-Hajaia, 2013;Asiri, 2014;Kral, 2014;Onyekwelu, 2014;Daraghma, 2018). In literature the IAS 2 demand that either the LC or NRV be used for the measurement of inventories (Asiri, 2014;Kral, 2014;Onyekwelu, 2014;Daraghma, 2018;iasplus, 2020).…”

“…Extant studies reveal the various methods afforded by the IAS 2 for the valuation of inventories (Al-Daoor, 2008;Shusheng, 2014;Monea, 2011;Siyanbola, 2012;Obaidat and Al-Hajaia, 2013;Asiri, 2014;Kral, 2014;Onyekwelu, 2014;Daraghma, 2018). In literature the IAS 2 demand that either the LC or NRV be used for the measurement of inventories (Asiri, 2014;Kral, 2014;Onyekwelu, 2014;Daraghma, 2018;iasplus, 2020). Using these methods necessitates the fair market value and the cost of inventory to be computed.…”

“…Cost Similarly, the treatment of inventory under US' GAAP over IFRS also highlighted several discrepancies such as related to inventory valuation cost, inventory fair market value, inventory value, conservative and loss reversal (Daraghma, 2018). Many authors pointed out the contention on inventories written down (Monea, 2011;Siyanbola, 2012;Doupnik, and Perera, 2015;Honkova, 2015;Kral, 2014;Daraghma, 2018). According to the IAS 2, when the NRV is lower than the cost of inventories resulting from the inventories being damage, obsolete, market demand changes and physical deterioration, written down should be allowed in the accounting period it was evaluated (Siyanbola, 2012;Kral, 2014;Honkova, 2015; IAS 2).…”

Compliance with IAS 2 in consolidated financial statements of PSE listed companies

“…Research of inventories is performed not only in Czech Republic but also in other countries around the world. A description of basic requirements of IAS 2 and a comparison with the Czech accounting legislation requirements was performed in the article of Král. (2014).…”