Lower of cost or market

/Lower of cost or market

Lower of cost or market

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

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By | 2018-01-22T10:23:58+00:00 August 13th, 2015|0 Comments

About the Author:

John Gillingham is a CPA and Accounting App Developer in San Francisco, California. Check the iOS App Store for Accounting Flashcards and the Debits & Credits Game. On Android: Learn Accounting Flashcards. Also on Kindle and iBooks.

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