What is the appropriate treatment in an interim financial report for inventory t

ID: 2431968 • Letter: W

Question

What is the appropriate treatment in an interim financial report for inventory that has cost below net realizable value?

The loss should always be recorded in the interim period in which cost drops below net realizable value.

There is no loss to report.

The loss should be ignored for interim reporting purposes.

The loss should be recorded in the interim period in which cost drops below net realizable value if the loss is considered temporary.

The loss should be recorded in the interim period in which cost drops below net realizable value if the loss is considered permanent.

Answer-

The loss should be recorded in the interim period in which market value drops below cost if the loss is considered permanent.

since it is interim reporting we should consider the loss if it is permanent.

Answer-

The loss should be recorded in the interim period in which market value drops below cost if the loss is considered permanent.

since it is interim reporting we should consider the loss if it is permanent.

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