Why inventory is to be valued at cost or market price whichever is lower?
For a manufacturing, wholesale or retail business, inventories are a significant part of a company’s short-term assets. This means that firms in these industries must invest large amounts of cash to purchase, convert or resell items held in inventory. As a result of inventory’s significance, how a company chooses to value items held in inventory will also affect financial reporting. Show
Valuation Rule
Valuation at Market
Acquisition Cost
Valuation at Cost
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