Lower of cost or market can be applied on an item or product category basis.

Question

Quizplus · Accepted Answer

Lower of cost or market can be applied to each item or category of items separately, depending on their individual circumstances. This means that for some items, the market value may be lower than their cost, while for others it may be higher. By applying lower of cost or market on an item-by-item or category-by-category basis, a company can determine the appropriate valuation for each inventory item, which can help ensure that financial statements are more accurate and reflective of the company's actual financial position.

Lower of Cost or Market Can Be Applied on an Item