An inventory written down due to the lower of cost and net realizable value may be written back up if market value increases.

Name: An inventory written down due to the lower of cost and net realizable value may be written back up if market value increases.
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Question

Quizplus · Accepted Answer

Under US GAAP, once inventory is written down to the lower of cost or net realizable value, it cannot be written back up if the market value increases. However, under IFRS, reversals are allowed if certain conditions are met.

An Inventory Written Down Due to the Lower of Cost