Lower Of Cost Or Market Step By Step Examples To Lcm Rule
What is the Lower of Cost or Market Rule? It simply means that the carrying amount of inventories on the balance sheet should be written down if the reported inventory value exceeds the market value. Such adjustment to inventory value affects the financial statements – Inventory Write downInventory Write DownInventory Write-Down refers to decreasing the value of an inventory due to economic or valuation reasons. When the inventory loses some of its value due to damaged or stolen goods, the management devalues it & reduces the reported value from the Balance Sheet....