ABSTRACT
We have seen that problems can arise in valuing a trading company’s stock if purchase prices change during a year, but at least purchase invoices do show the actual cost of an item at certain points in time. But what is the ‘cost’ of an item which a company makes itself? Varying quantities of stock usually remain in various stages of completion at the end of each period, so one needs to value ‘work-in-progress’ as well as stocks of raw materials and finished goods.
