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What is the accounting guideline usually associated with the lower of cost or market (LCM) rule for valuing inventory?

 

Conservatism  Economic Entity  Reliability

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Question ajoutée par Muhammad Mujtaba Shafique , RJ , Dream Fm106
Date de publication: 2016/02/13
Rabindra Kumar Mandal
par Rabindra Kumar Mandal , marketing Manger , Golden Touch Investments pvt.Ltd

Market value means the replacement cost of the inventory  Replacement cost may be in the form of purchase cost or manufacturing cost. In other words, market value is amount that we would have to pay to acquire inventory of the same quantity and quality through purchase or through manufacture. However, upper and lower limits have been placed on the market value of inventory

Aadil Sikandar
par Aadil Sikandar , Computer Operator , Pakistan Oilfield Ltd Pakistan

Assume it is the end of December and your retail store has digital cameras in inventory. You purchased the cameras directly from the manufacturer at a cost of $ each and you planned to sell the cameras at a retail price of $, a price that is in line with competing retailers.