Under IFRS,inventory write-downs due to using the lower-of-cost-or-market rule are allowed to be reversed in a future year if the market value subsequently increases.

Question

Quizplus · Accepted Answer

According to IFRS, inventory write-downs due to using the lower-of-cost-or-market rule are allowed to be reversed in a future year if the market value subsequently increases. This is known as a reversal of inventory write-down. However, the reversal is limited to the original write-down amount and cannot exceed the carrying value of the inventory before the write-down.

Under IFRS,inventory Write-Downs Due to Using the Lower-Of-Cost-Or-Market Rule Are