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Topic: Business
Number of pages / Number of words: 23 / 6411
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The remaining "backlog" or "top-up" depreciation is DEBITED from the current cost revaluation reserve, because it reflects a lower starting book value of the asset in question than is otherwise shown.

Adjustment 2: Cost of Sales

1. Find a suitable price index for the beginning of the year, end of the year and average through the year...


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Find a suitable price index for the beginning of the year, end of the year and average through the year. Convert all prices from historic dollars to index-average dollars by dividing by the index at the relevant time and multiplying by the average index.

2. Determine current cost of sales by: (opening inventory + purchases) ? closing inventory, all in adjusted current values...


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