Appendix A [further paragraphs] (AASB102_07-15_COMPdec21_01-22)

A not-for-profit entity may hold inventories whose future economic benefits or service potential are not directly related to their ability to generate net cash inflows.  These types of inventories may arise when an entity has determined to distribute certain goods at no charge or for a nominal amount.  In these cases, the future economic benefits or service potential of the inventory for financial reporting purposes is reflected by the amount the entity would need to pay to acquire the economic benefits or service potential if this was necessary to achieve the objectives of the entity.  Where the economic benefits or service potential cannot be acquired in the market, an estimate of replacement cost will need to be made.  If the purpose for which the inventory is held changes, then the inventory is valued using the provisions of paragraph 9.

The replacement cost that an entity would be prepared to incur in respect of an item of inventory would reflect any obsolescence or any other impairment.