in IAS 2 - Inventories by
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The case is the following: an entity gives its inventory to another entity for let's say a month, and then returns it back. How should be classified the asset: as inventory, financial asset, or maybe - other?
by Level 3 Member (6.2k points)
Are you asking from the perspective of the entity which is giving the stocks or receiving stocks?  Is it returned as at the date of balance sheet?
by
What is the reason for return of inventories? (Just to get an insight of the nature of this transaction)
by
From the perspective of giving entity. The purpose of the transaction is to release storage places, while there is no need in the inventory. For the period of the transaction the company, which receved the inventory, uses it and then returns it in the same quantity and condition.

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A key issue is whether the contract to deliver a non-financial item (a commodity) falls within the scope of IAS 39 Financial Instruments. Though IAS 39 would appear to apply only to financial assets and financial liabilities, certain contracts for non-financial items are also within its scope.The same issue applies to those entities that have adopted IFRS 9 Financial Instruments early, as its scope is the same as that of IAS 39. In determining whether the contract falls within the scope of IAS 39, it is necessary first to determine whether the contract permits:
– *** settlement in cash or in another financial instrument; or
– Can be settled by exchanging financial instruments, as if the contract itself is a financial instrument.

Given the facts in this case it is unlikely that you should recognize this as a financial asset.

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by Level 2 Member (3.9k points)
As a general rule, you need to take the fair value of a non-monetary item for accounting purposes.

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