2 Significant accounting policies
2.1 Statement of compliance
The financial statements of the Company
have been prepared in accordance with Indian
Accounting Standards (Ind AS) as per the
Companies (Indian Accounting Standards) Rules,
2015 as amended and notified under section 133
of the Companies Act, 2013 ('the Act") and other
relevant provisions of the Act and are subject to
approval of members at ensuing Annual General
Meeting.
2.2 Basis of preparation and presentation
The financial statements have been prepared on
accrual and going concern basis. The accounting
policies are applied consistently to all the periods
presented in the financial statements. AH assets
and Liabilities have been classified as current
or non-current as per the Company’s normal
operating cycle and other criteria as set out in
the Division II of Schedule III to the Companies
Act, 2013. Based on the nature of products
and the time between acquisition of assets for
processing and their realisation in cash and cash
equivalents, the Company has ascertained its
operating cycle as 12 months for the purpose of
current or non-current classification of assets
and Liabilities.
The financial statements have been prepared on
the historical cost basis except for certain items
that are measured at fair values at the end of
the reporting period, as explained in accounting
policies below.
Historical cost is generally based on the fair
value of the consideration given in exchange for
goods and services.
Fair value in accordance with Ind AS 113 is the
price that would be received to sell an asset
or paid to transfer a Liability in an orderly
transaction between market participants at the
measurement date, regardless of whether that
price is directly observable or estimated using
another valuation technique. In estimating the
fair value of an asset or a Liability, the Company
takes into account the characteristics of the
asset or Liability if market participants would take
those characteristics into account when pricing
the asset or Liability at the measurement date.
Fair value for measurement and / or disclosure
purposes in these financial statements is
determined on such a basis, except for share
based payment transactions that are within the
scope of Ind AS 102, and measurement that have
some similarities to fair value but are not fair
value, such as net realisable value in Ind AS 2.
In addition, for the financial reporting purposes,
fair value measurements are categorised into
Level 1, 2, or 3 based on the degree to which
the inputs to the fair value measurements are
observable and the significance of the inputs to
the fair value measurement in its entirety, which
are described as follows:
Level 1 inputs are quoted prices (unadjusted) in
active markets for identical assets or Liabilities
that the entity can access at the measurement
date;
Level 2 inputs are inputs, other than quoted
prices included within Level 1, that are observable
for asset or Liability, either directly or indirectly;
and
Level 3 inputs are unobservable inputs for the
asset or Liability.
If there is no quoted price in an active market,
then the Company uses valuation techniques that
maximize the use of relevant observable inputs
and minimize the use of unobservable inputs.
The chosen valuation technique incorporates all
of the factors that market participants would
take into account in pricing a transaction.
The preparation of the financial statements in
conformity with Ind AS requires management to
make judgements, estimates and assumptions
that affect the application of accounting policies
and the reported amounts of assets, Liabilities,
income and expenses. Actual results may differ
from these estimates. Estimates and underlying
assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised
in the period in which the estimates are revised
and in any future periods affected.
The areas involving critical estimates and
judgements are:
(i) Estimation of useful Life of property, plant and
equipment
(ii) Fair value measurements and valuation
processes
(iii) Estimation of defined benefit obligation
(iv) Income taxes
(v) Provision and contingencies
(vi) Provision for inventories
(vii) Impairment of trade receivables
Financial Year
The Company has opted to change its financial
year end from June 30 to March 31 of each year
for the purpose of preparation of its annual
financial statements.
The Board of Directors of the Company, on
January 23, 2025, have approved the change of
the Financial Year end from June 30 to March 31
of each year. Accordingly, the current Financial
Statements of the Company are for a period of
nine months commencing on July 1, 2024 and
ending on March 31, 2025. Further, as the said
financial statements are only for a period of
nine months, the figures for the current period
are not comparable with those of the previous
financial year ended June 30, 2024.
a. Revenue recognition
Revenue is recognised to the extent that it is
probable that the economic benefits will flow
to the Company and the revenue can be reliably
measured, regardless of when the payment is
being made. The Company’s revenue contracts
represent a single performance obligation to
sell its products to trade customers. Revenue
is measured at the transaction price of the
consideration received or receivable, taking
into account contractually defined terms of
payment and excluding taxes or duties collected
on behalf of the government. The Company has
concluded that it is the principal in all of its
revenue arrangements since it is the primary
obligor in all the revenue arrangements as it has
pricing Latitude and is also exposed to inventory
and credit risks. Revenue is reduced for variable
consideration including rebates and other similar
allowances. Accumulated experience is used
to estimate and accrue for the discounts and
rebates considering the terms of the underlying
schemes and arrangements with customers.
Company’s contracts with trade customers do
not have significant financing components.
However, goods and services tax (GST) is not
received by the Company on its own account.
Rather, it is tax collected on value added to
the commodity by the seller on behalf of the
government. Accordingly, it is excluded from
revenue.
The specific recognition criteria described below
must also be met before revenue is recognised.
Sale of goods
Revenue from the sale of goods is recognised
when the goods are delivered and titles have
passed, at which time all the following conditions
are satisfied:
a. the Company has transferred to the buyer the
significant risks and rewards of ownership of
the goods;
b. the Company retains neither continuing
managerial involvement to the degree usually
associated with ownership nor effective
control over the goods sold;
c. the amount of revenue can be measured
reliably;
d. it is probable that the economic benefits
associated with the transaction will flow to
the Company; and
e. the costs incurred or to be incurred in
respect of the transaction can be measured
reliably.
Revenue from shared service
Revenue from shared services is recognised as
and when services are rendered and related
costs are incurred, in accordance with the terms
of the contractual agreement.
Export Incentives
Export benefits availed as per prevalent schemes
are accrued each year in which the goods are
exported and when no significant uncertainty
exist regarding their ultimate collection.
Interest income
Interest income is recognised on time proportion
basis after taking into account the amount
outstanding and the interest rate applicable.
Interest income is also recorded using the
effective interest rate (EIR) wherever applicable.
Interest income is included in other income in
the Statement of Profit and Loss
Rental income
The Company's policy for recognition of revenue
from operating Leases is described in note 2.3(b)
below.
Processing income
Revenue from toll manufacturing services
offered to group companies on cost plus markup
in accordance with the terms of contract.
b. Leasing
The Company as a lessee
The Company’s Lease assets classes primarily
consist of Leases for office premises. The
Company assesses whether a contract contains
a Lease, at inception of a contract. A contract is,
or contains, a Lease if the contract conveys the
right to control the use of an identified asset for
a period of time in exchange for consideration.
To assess whether a contract conveys the right
to control the use of an identified asset, the
Company assesses whether:
(i) The contract involves the use of an identified
asset;
(ii) the Company has substantially all of the
economic benefits from use of the asset
through the period of the Lease and
(iii) t he Company has the right to direct the use
of the asset.
At the date of commencement of the Lease,
the Company recognizes a right-of-use asset
(“ROU”) and a corresponding Lease Liability for
all Lease arrangements in which it is a Lessee,
except for Leases with a term of twelve months
or Less (short-term Leases) and Low value Leases.
For these short-term and Low value Leases,
the Company recognizes the Lease payments
as an operating expense on a straight-line
basis over the term of the Lease.
Certain Lease arrangements includes the options
to extend or terminate the Lease before the end
of the Lease term. ROU assets and Lease Liabilities
includes these options when it is reasonably
certain that they will be exercised.
The right-of-use assets are initially recognized at
cost, which comprises the initial amount of the
Lease Liability adjusted for any Lease payments
made at or prior to the commencement date
of the Lease plus any initial direct costs Less
any Lease incentives. They are subsequently
measured at cost Less accumulated depreciation
and impairment Losses.
Right-of-use assets are depreciated from the
commencement date on a straight-line basis
over the shorter of the Lease term and useful Life
of the underlying asset.
The Lease Liability is initially measured at
amortized cost at the present value of the
future Lease payments. The Lease payments are
discounted using the interest rate implicit in
the Lease or, if not readily determinable, using
the incremental borrowing rates in the country
of domicile of these Leases. Lease Liabilities are
re-measured with a corresponding adjustment
to the related right of use asset if the Company
changes its assessment if whether it will exercise
an extension or a termination option.
Lease Liability and ROU asset have been
separately presented in the Balance Sheet and
Lease payments have been classified as financing
cash flows.
The Company as a lessor
Leases for which the Company is a Lessor
is classified as a finance or operating Lease.
Whenever the terms of the Lease transfer
substantially all the risks and rewards of
ownership to the Lessee, the contract is classified
as a finance Lease. ALL other Leases are classified
as operating Leases.
When the Company is an intermediate Lessor,
it accounts for its interests in the head Lease
and the sublease separately. The sublease is
classified as a finance or operating Lease by
reference to the right-of-use asset arising from
the head Lease.
For operating Leases, rental income is recognized
on a straight Line basis over the term of the
relevant Lease.
c. Foreign currencies
The financial statements are presented in Indian
Rupee (? in Lakhs), which is also the Company's
functional currency.
Transaction and balances
Transactions in currencies other than the
Company's functional currency (i.e. foreign
currencies) are recognised atthe rates of exchange
prevailing at the dates of the transactions. At
the end of each reporting period, monetary
items denominated in foreign currencies are
retranslated at the rates prevailing at that
date. Non-monetary items carried at fair value
that are denominated in foreign currencies are
retranslated at the rates prevailing at the date
when the fair value is determined. Non-monetary
items that are measured in terms of historical
cost in a foreign currency are not retranslated.
Exchange differences on monetary items are
recognised in the Statement of Profit and Loss
in the period which they arise.
d. Borrowing costs
Borrowing costs directly attributable to the
acquisition, construction or production of
qualifying assets, which are assets that
necessarily takes a substantial period of time to
get ready for its intended use or sale, are added
to the cost of those assets, until such time as the
assets are substantially ready for their intended
use or sale.
AH other borrowing costs are recognised in the
Statement of Profit and Loss in the period in
which they are incurred.
e. Employee benefits
i) Short term employee benefits - Short
term employee benefits including salaries
and performance incentives, are charged
to the Statement of Profit and Loss on an
undiscounted, accrual basis during the
period of employment.
ii) Post-employment Benefits
a) Defined Contribution Plans:
The Company has Defined Contribution
Plans for post employment benefits charged
to the Statement of Profit and Loss, in the
form of
- Superannuation Fund as per Company
policy administered by Company
managed trust; and
- State Defined Contribution Plans:
Employer's Contribution to Employees'
State Insurance.
The Company’s contribution is recognised as
an expense in the Statement of Profit and Loss
during the period in which the employee renders
the related service.
b) Defined Benefit Plans:
Funded Plan: The Company has Defined
Benefit Plan for post employment benefits
in the form of
- Gratuity for all employees administered
through trust.
- Provident Fund for all permanent
employees is administered through a trust.
The Provident Fund is administered by
trustees of an independently constituted
common trust recognised by the Income
tax authorities. Periodic contributions to
the Fund are charged to revenue and when
services are rendered by the employees.
The interest rate payable by the trust to the
beneficiaries every year is being notified
by the Government. The Company has an
obligation to make good the shortfall, if any,
between the return from the investment of
the trust and notified interest rate by the
Government.
Unfunded Plan: The Company has unfunded
Defined Benefit Plans in the form of Post
Retirement Medical Benefits (PRMB) and
Compensated Absences as per its policy.
The Company’s net obligation in respect
of a defined benefit plan is calculated by
estimating the amount of future benefit that
employees have earned in return for their
service in the current and prior periods;
that benefit is discounted to determine its
present value. Any unrecognised past service
cost and the fair value of any plan assets
are deducted. Liability for the above defined
benefit plans is provided on the basis of
valuation, as at the Balance Sheet date,
carried out by independent actuary. The
actuarial method used for measuring the
Liability is the Projected Unit Credit method.
Remeasurements, comprising actuarial gains
and Losses, the effect of the asset ceiling,
excluding amounts included in net interest
on the net defined benefit Liability and the
return on plan assets (excluding amounts
included in net interest on the net defined
benefit Liability), are recognised immediately
in the Balance Sheet with a corresponding
debit or credit to retained earnings through
other comprehensive income in the period in
which they occur. Remeasurements are not
reclassified to the Statement of Profit and
Loss in subsequent periods.
Past service costs are recognised in the
Statement of Profit and Loss on the earlier
of:
? The date of the plan amendment or
curtailment, and
? The date that the company recognises
related restructuring costs
Net interest is calculated by applying the
discount rate at the beginning of the year to
the net defined benefit Liability or asset. The
Company recognises the following changes
in the net defined benefit obligation as an
expense in the Statement of Profit and Loss:
? Service costs comprising current service
costs, past-service costs, gains and
Losses on curtailments and non-routine
settlements; and
? Net interest expense or income
iii) Liability for Compensated Absences and
Leave Travel Allowance which are in the
nature of short term benefits is provided
for as per company rules based on the
undiscounted amount of benefits expected
to be paid in exchange of services rendered.
iv) Termination benefits in terms of Company
policy are recognised as an expense as and
when incurred.
v) Long Service Awards are payable to
employees on completion of specified years
of service.
f. Share-based payment arrangements
Employees (including senior executives) of the
Company receive remuneration in the form of
share-based payments, whereby employees
render services as consideration for equity
instruments (equity-settled transactions).
Equity-settled transactions
The Procter & Gamble Company, USA has an
"Employee Stock Option Plan (ESOP)" whereby
the specified employees covered by the plan
are granted an option to purchase shares of the
Ultimate Holding Company i.e. - The Procter &
Gamble Company, USA at a fixed price (grant
price) for a fixed period of time. The difference
between the market price and grant price on
the exercise of the stock options issued by the
Ultimate Holding Company to the employees of
the Company is charged in the year of exercise
by the employees. Parent Company will recharge
an amount equal to spread as on date of exercise
of options.
The cost of equity-settled transactions is
recognised in employee benefits expense (refer
note 2.3(e)), together with a corresponding
increase in equity (other reserves) over the
period in which the service and performance
conditions are fulfilled (the vesting period).
The cumulative expense recognised for equity-
settled transactions at each reporting date
until the vesting date reflects the extent to
which the vesting period has expired and the
Company’s best estimate of the number of equity
instruments that will ultimately vest. Recharge
to parent company to the extent of fair value of
options will be debited in equity reserves and any
excess recharge above the fair value of options
will be recognised as equity distribution from the
Company.
Employee share purchase plan
The Procter & Gamble Company, USA has an
“International Stock Ownership Plan (ISOP)”
(employee share purchase plan) whereby
specified employees of its subsidiaries have
been given a right to purchase shares of the
Ultimate Holding Company i.e. The Procter &
Gamble Company, USA. Every employee who
opts for the scheme contributes by way of payroll
deduction up to a specified percentage (upto
15%) of base salary towards purchase of shares
on a monthly basis. The Company contributes
50% of employee’s contribution (restricted to
2.5% of his base salary) and charged to employee
benefits expense. The expenses related to ISOP
are recognised immediately in the Statement
of Profit and Loss since there are no vesting
conditions attached to the scheme.
The expense in the Statement of Profit and
Loss for a period represents the movement
in cumulative expense recognised as at the
beginning and end of that period.
When the terms of an equity-settled award are
modified, the minimum expense recognised
is the expense had the terms had not been
modified, if the original terms of the award are
met. An additional expense is recognised for
any modification that increases the total fair
value of the share-based payment transaction,
or is otherwise beneficial to the employee as
measured at the date of modification. Where
an award is cancelled by the entity or by the
counterparty, any remaining element of the fair
value of the award is expensed immediately
through the Statement of Profit and Loss.
g. Taxation
Income tax expense represents the sum of the
current tax and deferred tax.
Current tax
The current tax is based on taxable profit for the
year. Taxable profit differs from 'profit before
tax' as reported in the Statement of Profit and
Loss because of items of income or expense
that are taxable or deductible in other years and
items that are never taxable or deductible. The
Company's current tax is calculated using tax
rates that have been enacted or substantively
enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognised on temporary
differences between the carrying amounts of
assets and Liabilities in the financial statements
and the corresponding tax bases used in the
computation of taxable profits. Deferred tax
Liabilities are generally recognised for all taxable
temporary differences. Deferred tax assets are
generally recognised for all deductible temporary
differences to the extent that it is probable that
taxable profit will be available against which
those deductible temporary differences can be
utilised.
The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced
to the extent that it is no Longer probable that
sufficient taxable profit will be available to allow
all or part of the asset to be recovered.
Deferred tax Liabilities and assets are measured
at the tax rates that are expected to apply in the
period in which the Liability is settled or the asset
is realised, based on tax rates (and tax Laws) that
have been enacted or substantively enacted by
the end of the reporting period.
The measurement of deferred tax Liabilities and
assets reflects the tax consequences that would
follow from the manner in which the Company
expects, at the end of the reporting period,
to recover or settle the carrying amount of its
assets and Liabilities.
Current and deferred tax for the year
Current and deferred tax are recognised in the
Statement of Profit and Loss, except when they
relate to items that are recognised in other
comprehensive income or directly in equity, in
which case, the current and deferred tax are also
recognised in other comprehensive income or
directly in equity respectively.
Current tax assets and current tax Liabilities are
offset when there is a Legally enforceable right
to set off the recognised amounts and there is
an intention to settle the asset and the Liability
on a net basis. Deferred tax assets and deferred
tax Liabilities are offset when there is a Legally
enforceable right to set off current tax assets
against current tax Liabilities; and the deferred
tax assets and the deferred tax Liabilities relate
to income taxes Levied by the same taxation
authority.
h. Property, plant and equipment
Property, plant and equipment held for use in
the production or supply of goods or services,
or for administrative purposes, are stated in
the balance sheet at acquisition cost Less
accumulated depreciation and accumulated
impairment Losses, if any. Freehold Land is not
depreciated. Cost of acquisition of property,
plant and equipment comprises its purchase
price including import duties and non¬
refundable purchase taxes after deducting trade
discounts, rebates and any directly attributable
cost of bringing the item to its working condition
for its intended use. Subsequent costs are
included in the assets' carrying amount or
recognised as a separate asset, as appropriate,
only when it is probable that future economic
benefits associated with the item will flow to
the Company and the cost of the item can be
measured reliably.
Properties in the course of construction for
production, supply or administrative purposes
are carried at cost, Less any recognised
impairment Loss. Cost directly attributable cost
of bringing the item to its working condition
for its intended use including professional fees
and, for qualifying assets, borrowing costs
capitalised in accordance with the Company's
accounting policy. Such properties are classified
to the appropriate categories of property, plant
and equipment when completed and ready for
intended use. Depreciation of these assets,
on the same basis as other property assets,
commences when the assets are ready for their
intended use.
Cost of Property, plant and equipment which are
not ready for intended use, as on the Balance
Sheet date, is shown as capital work in progress.
AH other repairs and maintenance cost are
charged to the Statement of Profit and Loss
during the period in which they are incurred.
Depreciation is recognised so as to write off the
cost of assets (other than freehold Land) Less
their residual values over their useful Life, using
straight-line method. The estimated useful Lives,
residual values and depreciation method are
reviewed at the end of each reporting period, with
the effect of any changes in estimate accounted
for on a prospective basis.
The management's estimate of useful Lives are
in accordance with Schedule II to the Act, other
than certain assets which are based on the
Company's expected usage pattern supported by
technical assessment.
The estimated useful Life of certain property,
plant and equipment of the Company are as
follows:
Leasehold improvements are amortised over the
primary period of Lease.
Depreciation on fixed assets added/ disposed
off/ discarded during the year is provided on pro¬
rata basis with reference to subsequent month
of addition/ disposal/ discarding.
An item of property, plant and equipment is
derecognised upon disposal or when no future
economic benefits are expected to arise from
the continued use of the asset. Any gain or Loss
arising on the disposal or retirement of an item
of property, plant and equipment is determined
as the difference between the sale proceeds
and the carrying amount of the asset and is
recognised in the Statement of Profit and Loss.
i. Impairment of property, plant and equipment
At the end of each reporting period, the Company
reviews the carrying amounts of its tangible assets
to determine whether there is any indication that
those assets have suffered an impairment Loss.
If any such indication exists, the recoverable
amount is estimated in order to determine the
extent of the impairment Loss (if any). When it is
not possible to estimate the recoverable amount
of an individual asset, the Company estimates the
recoverable amount of the cash-generating unit to
which the asset belongs. When a reasonable and
consistent basis of allocation can be identified,
corporate assets are also allocated to individual
cash-generating units, or otherwise they are
allocated to the smallest group of cash-generating
units for which a reasonable and consistent basis
can be identified.
Recoverable amount is the higher of fair value Less
costs of disposal and value in use. In assessing
value in use, the estimated future cash flows are
discounted to their present value using a pre¬
tax discount rate that reflects current market
assessments of the time value of money and the
risks specific to the asset for which the estimates
of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash¬
generating unit) is estimated to be Less than its
own carrying amount, the carrying amount of
the asset (or cash-generating unit) is reduced to
its recoverable amount. An impairment Loss is
recognised immediately in the Statement of Profit
and Loss.
When an impairment Loss subsequently reverses,
the carrying amount of the asset (or a cash¬
generating unit) is increased to the revised
estimate of its recoverable amount, but so
that the increased carrying amount does not
exceed the carrying amount that would have
been determined had no impairment Loss been
recognised for the asset (or cash-generating unit)
in prior years. A reversal is recognised immediately
in Statement of Profit and Loss.
j. Investment property
Property that is held for Long-term rental yields
or for capital appreciation or both, and that is
not occupied by the Company, is classified as
investment property. Investment property is
measured initially at its cost, including related
transaction costs and where applicable borrowing
costs. Subsequent expenditure is capitalized
to the asset’s carrying amount only when it is
probable that future economic benefits associated
with expenditure will flow to the Company and the
cost of the item can be measured reliably. AH other
repairs and maintenance costs are expensed when
incurred. When part of an investment property
is replaced, the carrying amount of the replaced
part is derecognized. Investment properties are
derecognized either when they have been disposed
of or when they are permanently withdrawn from
use and no future economic benefit is expected
from their disposal. The difference between the
net disposal proceeds and the carrying amount
of the asset is recognized in profit or Loss in the
period of de-recognition.
Subsequent to initial recognition, investment
properties are stated at cost Less accumulated
depreciation and accumulated impairment Loss, if
any.
Investment properties are depreciated using the
straight-line method over their estimated useful
Lives. Investment properties generally have a useful
Life of 25-40 years.
k. Intangible assets
Intangible assets that are acquired by the
Company are measured initially at cost. Cost of
acquisition of separately purchased intangible
asset comprises its purchase price including
import duties and non-refundable purchase
taxes after deducting trade discounts, rebates
and any directly attributable cost of bringing the
item to its working condition for its intended
use.After initial recognition, an intangible asset
is carried at its cost Less any accumulated
amortisation and any accumulated impairment
Loss, if any.
Subsequent expenditure is capitalised only
when it increases the future economic benefits
from the specific asset to which it relates. An
intangible asset is derecognised on disposal or
when no future economic benefits are expected
from its use.
Losses arising from retirement and gains or
Losses arising from disposal of an intangible asset
are measured as the difference between the net
disposal proceeds and the carrying amount of
the asset and are recognised in the Statement of
Profit and Loss.
The company's intangible assets consist of
computer software having finite estimated useful
Life of 3-6 years. Finite-Life intangible assets are
amortised on a straight-line basis over the period
of their estimated useful Lives. The amortisation
period and the amortisation method for finite-
life intangible assets is reviewed at each
financial year end and adjusted prospectively, if
appropriate.
l. Non-current assets held for sale
Non-current assets and Liabilities are classified
as held for sale if it is highly probable that they
will be recovered primarily through sale rather
than through continued use.
Such assets are generally measured at Lower of
their carrying amount and fair value Less costs
to sell. Losses on initial classification as held
for sale and subsequent gains and Losses on re¬
measurement are recognised in Statement of
Profit or Loss.
Once classified as held for sale, intangible
assets, property, plant and equipment and
investment properties are no Longer amortised
or depreciated.
m. Inventories
Inventories consist of raw and packing materials,
stores and spares, work-in-progress, stock-in¬
trade and finished goods. Inventories are valued
at Lower of cost and net realisable value after
providing for obsolescence and other Losses
where considered necessary. Cost of inventories
is determined on weighted average basis. Cost
of manufactured finished goods and work-in¬
progress includes material cost determined on
weighted average basis and also includes an
appropriate portion of allocable overheads.
Cost of raw materials and stores and spares
includes cost of purchase and other costs
incurred in bringing the inventories to their
present Location and condition. Cost of finished
goods and work-in-progress include all costs
of purchases, conversion costs and other costs
incurred in bringing the inventories to their
present Location and condition. It includes the
appropriate portion of allocable overheads.
The net realisable value of work-in-progress is
determined with reference to the selling prices
of related finished products. Raw materials and
other supplies held for use in the production of
finished products are not written down below
cost except in cases where material prices have
declined and it is estimated that the cost of the
finished products will exceed their net realisable
value.
Net realisable value is the estimated selling price
in the ordinary course of business, Less estimated
costs of completion and the estimated costs
necessary to make the sale.
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