Under U.S. GAAP, if inventory is written down under lower-of-cost-or-market, it may not be written back up to its original cost in a subsequent period.

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This is known as the "ceiling" constraint and is a conservative approach taken by U.S. GAAP to prevent the overstatement of inventory values. Once inventory has been written down to market value, it cannot be increased again until it is actually sold or disposed of.

Under US GAAP, If Inventory Is Written Down Under Lower-Of-Cost-Or-Market, It