The inventory write-down rule under IAS 2 can best be labeled

Question

Quizplus · Accepted Answer

The inventory write-down rule under IAS 2 is called "lower of cost or net realizable value." This means that inventory should be reported at the lower of its cost or net realizable value, where net realizable value is the estimated selling price less the estimated costs to complete and sell the inventory. This rule prevents companies from carrying inventory at a value greater than the amount it could realistically be sold for.

The Inventory Write-Down Rule Under IAS 2 Can Best Be