Inventory adjustments

Accounting standards with regards to adjusting the value of inventory on the balance sheet.

Under IFRS, inventory value is reported at the lower of cost or net realisable value. If NRV<inventory value, write-down to NRV. Reversal of write-down is allowed.

Under US GAAP, inventory value is reported at the lower of cost or market. Market is usually equal to replacement cost, but cannot be greater than NRV or less than NRV minus a normal profit margin. Reversal of write-down is NOT allowed.

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