Accounting for IGCSE & O level - Final Statements (Section 6 - No. 31)
What are the implications if NRV is less than cost?
The inventory should be written down.
A loss must be recorded.
The asset value is too high.
No action is needed
Selitys
If NRV < cost, the inventory value needs to be written down and a loss is recorded to comply with prudence.