Definitions Of   Inventories :

3. The following terms are used in this Standard with the meanings specified:

3.1. Inventories are assets:

      (a) held for sale in the ordinary course of business;

      (b) in the process of production for such sale; or

      (c) in the form of materials or supplies to be consumed in the production process or in the rendering of services.

3.2. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

4. Inventories encompass goods purchased and held for resale, for example, merchandise purchased by a retailer and held for resale, computer software held for resale, or land and other property held for resale. Inventories also encompass finished goods produced, or work in progress being produced, by the enterprise and include materials, maintenance supplies, consumables and loose tools awaiting use in the production process. Inventories do not include machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular; such machinery spares are accounted for in accordance with Accounting Standard (AS) 10, Accounting for Fixed Assets.