IFRS requires inventory to be written down below its original cost in some situations, but inventory cannot be written up above its original cost.

Question

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IFRS requires inventory to be written down to its net realizable value if that value is lower than its original cost. However, inventory cannot be written up above its original cost even if the market value of inventory increases. This conservative approach is taken to avoid overvaluing assets and to prevent financial statement manipulation.

IFRS Requires Inventory to Be Written Down Below Its Original