In my world now (hehehe), we are using US GAAP, inventories are carried at cost unless there is a decline in market value of the inventory - in such a case - LCM rule will apply. Another exception to the cost rule is that if inventory is damaged or repossesed - in this case inventory should be stated at replacement cost. Also, other types of inventories can be carried at sales price - which maybe due to inability to determine approximate cost or there is an immediate marketability of quoted market prices. Example of inventories valued at sales price includes precious metals & agriculture products

Just watch out for it…hhe

Good job. Hope to read blogs like this - very educational and mind stimulating.

Deuts request - i-discuss mo naman tungkol sa Impairment of assets.

“Well, inventory carried at cost is also considered at its net realizable value. Because the standard says so, it is understood, the accountant and the auditors have done an approach that shall present the inventory at NRV.”

You said that inventory carried at cost is also considered at its NRV. However, in your last comment, you said and I quote:

“I did’t say cost is net realizable value, its either way as the statement lower of cost or net realizable value say

“Basically, inventory should be carried at the of cost or net realizable value. It’s not valued at cost, nor in net realizable value as an absolute rule. It should be the “lower” of the two”

Can you please elaborate what you meant in your two comments that I quoted above?

I did’t say cost is net realizable value, its either way as the statement lower of cost or net realizable value say

“Basically, inventory should be carried at the of cost or net realizable value. It’s not valued at cost, nor in net realizable value as an absolute rule. It should be the “lower” of the two”

Correct, my explaination is only for the sake of argument.

“Do you mean that inventory should be valued “always” at net realizable value? Nope, it’s the lower of cost and net realizable value”

In a manner, inventory should be valued good as cash. Even though inventory is valued at cost, I will conclude cost is lower than NRV. Therefore cost is more liquid under the rule of conservatism.

I encourage everyone, especially our colleagues in CLMC, to participate in every topic. Let us “speak our mind,” so to speak.

Nagpalit ka na naman ng Name mo! Hindi n nman yan mag-a-add sa top 8 favorite visitors ko. pare-pareho lng kau ni jogar/jamal at edwin/edwinboy/edwin boy. Papalit palit ng pangalan….hehehehe:)