Freight Station charge to be beadded to Inventory Value? - Professionals - Accounting - TIK Share

Freight Station charge to be beadded to Inventory Value?

Ankit Sharma


One of my Client imports chemicals and temporarily stores them in Container Freight Station. Are warehouse charges, pertaining to the stock in handas  on 31-03-2013, to be added to the cost of inventory or should it be debited to profit & loass a/c for whole period?

CA Pulkit Sharma


Your question can be very well answered by refering to AS2 issued by ICAI.

As per as2, 

Cost of Inventories

"The cost of inventories should comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition."


So if you read it, as2 says cost should include expenses incurred till the stock is in present condition. So if your company is consuming the inventory after drawing it from station than, the cost should be debited to P/L.

If freight station is just a temparory point while bringing the inventory to consumption point than add it to Inventory.


If any doubt please ask.