Assertion (A): Under Ind AS 2, inventories are measured at the lower of cost and net realizable value (NRV). Reason (R): This ensures that assets are not overstated and losses are recognized in the period they occur, adhering to the prudence concept. Choose the correct option.
A. A is false but R is true
B. Both A and R are true but R is NOT the correct explanation of A
C. A is true but R is false
D. Both A and R are true and R is the correct explanation of A
Answer: Option D
Solution (By JKSSB Mock Tests)
Ind AS 2 mandates the lower of cost and NRV rule. This is a direct application of the prudence (conservatism) concept, ensuring assets aren't overstated and potential losses are recognized immediately. R correctly explains A.
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