Respuesta :
The net realizable value approach can be applied to groups of inventory items; the entire inventory; individual inventory items.
Inventory must be documented at the lesser cost or the rate at which it can be sold in accordance with the lesser cost or net realizable value principle. A product's net realizable value is its expected selling price less the expenses related to its production, marketing, and delivery.
Thus, inventory should be written down to its net realizable value if it is recorded in the accounting records at a value higher than its net realizable value. Selling price less completion, disposal, and transportation expenses equal net realizable value. It is possible to apply the lower of cost and net realizable value to specific inventory items, logical categories of inventory, or the entire inventory.
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