Zelda Company has provided the following values for its 400 units of inventory at the end of 2010: $\begin{array}{ll}
\text { Item } & \text { Per Unit } \
\text { Historical cost } & \$ 5.00 \
\text { Replacement cost } & \$ 4.20 \
\text { Net realizable value } & \$ 4.50 \
\text { Normal profit margin } & \$ .80
\end{array}$ Under IFRS requirements, the per-unit reported value for Zelda's inventory will be

Question

Quizplus · Accepted Answer

Under IFRS, inventory is reported at the lower of cost or net realizable value (NRV). The historical cost is $5.00, but the NRV (net realizable value minus normal profit margin) is $4.50. Since $4.50 is lower than the historical cost, the inventory should be reported at $4.50 per unit according to IFRS requirements.

Zelda Company Has Provided the Following Values for Its 400