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CMA Intermediate · Corporate Accounting and Auditing · Inventories (Ind AS 2)

Under Ind AS 2, which of the following is NOT excluded from the scope of the Standard (i.e., is accounted for as inventory under Ind AS 2)?

Land held for resale in the ordinary course of business is inventory under Ind AS 2, because the Standard expressly includes land and other property held for resale. Financial instruments, biological assets and agricultural produce at the point of harvest are excluded from its scope.

  1. ABiological assets related to agricultural activity
  2. BAgricultural produce at the point of harvest
  3. CFinancial instruments covered by Ind AS 32 and Ind AS 109
  4. DLand held by a real estate company for resale in the ordinary course of businessCorrect

Explanation

Ind AS 2 applies to all inventories except financial instruments and biological assets related to agricultural activity and agricultural produce at the point of harvest (Ind AS 41). Land and other property held for resale are expressly included within inventories. The other three options are scope exclusions.

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