Lower of cost or market: Methodology of how inventory is valued at the price paid for or a lower price based on GAAP

  • Inventory cost is never greater than the price paid for the item
  • Cost is the price paid for the item
  • Market value is determined by first calculating three different values: Replacement cost, net realizable value (NRV), and NRV less normal profit margin
N_17F_Lower_of_cost_or_market

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