Accounting for IGCSE & O level - Final Statements (Section 14 - No. 7)
Which item is usually valued at the lower of cost or net realisable value (NRV)?
Property, plant, and equipment
Inventory
Trade receivables
Goodwill
Explication
Inventory is valued at the lower of cost or net realisable value to comply with the principle of prudence and to prevent overstating the value of assets.