SIC-1
Historical
Consistency–Different Cost Formulas for Inventories
Clarified whether an entity could use different cost formulas for inventories with similar nature and use, or simply because held in different locations or subject to different tax rules. Withdrawn in 2003.
Historical Reference
SIC-1 was withdrawn in March 2003 when the IASB issued a revised IAS 2 Inventories, which incorporated the consistency requirement directly into the standard and eliminated the need for the interpretation.
This page is retained for historical and comparative reference. Entities should refer to the current standard that superseded this interpretation for authoritative guidance.
Current Standard
IAS 2 Inventories 1
What SIC-1 Addressed (Historical)
What SIC-1 addressed
SIC-1 addressed whether an entity could use different cost formulas for inventories with similar nature and use, or whether consistency was required simply because inventories were held in different locations or subject to different tax rules. It sought to clarify the scope of the consistency requirement in IAS 2.
2
The Conclusion It Reached (Historical)
The conclusion it reached
SIC-1 concluded that different cost formulas may only be used when they are appropriate to the specific circumstances of the inventories. Inventories with similar nature and use must be accounted for on a consistent basis, regardless of their location or the tax rules that apply to them. A change in cost formula is only acceptable when there is a genuine change in the nature or use of the inventories.
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Where This Guidance Lives Today
Where this guidance lives today
Superseded byIAS 2 Inventories
Why withdrawnThe 2003 revision of IAS 2 incorporated the consistency requirement directly into the standard
Current statusWithdrawn
4
Glossary
Cost formulas
The systematic allocation of the cost of inventories to specific items, such as FIFO, weighted average cost, or specific identification.
Consistency
The requirement that an entity apply the same accounting policies to similar transactions and events from one period to the next.
Financial statement key
BS Balance sheet
IS Income statement
SE Statement of changes in equity
OCI Other comprehensive income
SCF Statement of cash flows
History & Development
Jan-1997
In January 1997 the Standing Interpretations Committee issued SIC-1 Consistency–Different Cost Formulas for Inventories.
Apr-2001
In April 2001 the International Accounting Standards Board adopted SIC-1.
Minor consequential amendment to SIC-1
Mar-2003
In March 2003 the Board issued a revised IAS 2 Inventories which superseded SIC-1.
Superseded by revised IAS 2