Why should I choose AnalystNotes?

Simply put: AnalystNotes offers the best value and the best product available to help you pass your exams.

Find out more

Basic Question 0 of 11

"Valuation of inventory at the lower of cost or market" abandons which of the following accounting principles?

A. Historical cost
B. Consistency
C. Conservatism
Check Answer Next Q Print

User Contributed Comments 7

User Comment
quincy remember this
danlan I think it reflects the conservatism.
danlan It abandons historical cost and reflects conservatism, check question 5 also.
UUchi aha nice danlan i was confused :-)
cong Under IAS, inventory is valued at the minimum of (historical cost, net realizable value). Under GAAP, inventory is valued at the minimum of (historical, market cost). Reversal is possible but subejct to the original write-down value under IAS and prohibited under GAPP.
gill15 If LCM is valued at lower of historical cost or market, how is it that it abandons the historical cost principle?
It's using it? Maybe because if the market value is lower than it will abandon the historical cost and use the market value?
Shaan23 That does seem odd. Cost is historical
You need to log in first to add your comment.
Your review questions and global ranking system were so helpful.
Lina

Lina

Learning Outcome Statements

calculate, interpret, and evaluate measures of dispersion to address an investment problem

CFA® 2025 Level I Curriculum, Volume 1, Module 3.