IAS 2 - Inventories, Recognized as an Expense

When items are held for sale in the normal course of business as a means to earn revenue, the carrying amount of those inventories should be recognized as an expense in the period they are sold.  The items should also be written down to net realisable value and all losses arising upon sale or profits recognized on the income statement.

Reversals may also require an adjustment to the carrying amount of inventories, in the period which they occur.

If inventories are included as a component of an asset such as property, plant or equipment, then a portion of that inventory is expensed over the life of that asset class.