Back to the track — Cost Accountant
Inventory valuation: cost first, then recoverability
Start with a complete quantity-and-value population, calculate weighted average and value closing inventory. After cost is sound, test NRV using selling price less completion and selling costs and record only the difference. Do not write raw material down merely because its price fell when finished product is expected to sell at or above cost; if the finished-product test indicates a write-down, replacement cost may be the best available measure. Reversal cannot raise carrying amount above the lower of cost and revised NRV.
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- Staged accounting case
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