GAAP inventory: Lower Cost or Market examples, carrying, understand, 2011

sabina

Hey guys,

Just wondering if anyone has an easy to understand way of explaining lower of cost or market for GAAP inventory.

Cost is easy to determine....for "market value", in the books it says to compare the carrying value to replacement cost, and it must lie between NRV and NRV- profit margin. I'm going through some examples, but still don't really get exactly how to pin what "market" is.

Thanks!



Edited 1 time(s). Last edit at Wednesday, May 11, 2011 at 10:10AM by thisisbrianly.