Conversion costs within the scope of TAS 2 inventories and FRS for LMEs chapter 6

Stock assets are very important to businesses. Inventory is a set of assets that facilitate the ongoing activities of businesses that produce goods. Regarding inventory management, there are different rules in the Tax Procedure Law (TPL), TAS 2 Inventories and Financial Reporting Standard for Large and Medium-Sized Enterprises (FRS for LMEs). Indeed, one of the differences is the proposed method of inventory costing. TAS 2 observes the normal cost method. TPL advocates the full expense method. Conversely, BOBI FRS dominates a typical cost and full cost approach. Profit and loss results and accounting entries are also different due to the costing methods chosen. This situation also affects the decisions of financial statement users. The full cost method calculates the total cost of production for all products, while the regular cost method calculates the portion of the normal production costs associated with the products themselves, the rest is reported as period cost. In our research titled TAS 2 inventories and BOBI FRS Chapter 6 conversion costs associated with inventories, the rules for calculating and documenting product costs are explained with examples based on the data of a company that produces meat products. In the examination, the cost information obtained from a company that produces meat products was evaluated in terms of TPL, TAS 2 and FRS for LMEs. The results of the study showed that the normal cost method is more accurate and reliable than the full cost method in the non-trading periods. This result also has an impact on cost information and accounting records.