Pricing of material issues depends on a large number of factors. However, the following basic factors must be fulfilled:
(i) The issue price must cover the cost of purchase.
(ii) It must reflect current market price.
(iii) It should not destabilise costs from time to time.
ADVERTISEMENTS:
(iv) It should not lead to adjustment of stock at the end of the accounting year.
(v) It should take into account the policy of management as regards valuing the stock.