1. When applying lower of cost or market, market value A. is defined as the selling price B. should not exceed the net realizable value C. should not exceed the net realizable value less an allowance for a normal profit margin D. should not exceed the net realizable value plus an allowance for a normal profit margin
Please provide some explanation for the below question:
1. When applying lower of cost or market, market value
A. is defined as the selling price
B. should not exceed the net realizable value
C. should not exceed the net realizable value less an allowance for a normal profit margin
D. should not exceed the net realizable value plus an allowance for a normal profit margin
This Net realizable value(NRV) generally a common method used in valuation of an asset in inventory accounting.
Net realizable value (NRV) is the value of the asset where the asset value is realized on the sale of asset minus the estimation of costs of sale of the asset.
This method of valuation is used by
1. Generally Accepted Accounting Principles(GAAP)
2. International Financial Reporting Standards(IFRS).
Market value is described as how much the asset value is worth in the financial market.
This determination can be made in the financial market according to the market participants.
This is commonly referred to the company's market capitalization.
This company's market capitalization is determined by multiplying the number of shares with the current market price.
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