In valuing inventories using the lower of cost or market approach, the term market means the price at which the item normally sells in the market that it is normally traded (e.g., retail or wholesale) by the taxpayer.

Question

Quizplus · Accepted Answer

In the context of the lower of cost or market approach, the term "market" refers to the current replacement cost of the inventory, not the selling price of the inventory items.

In Valuing Inventories Using the Lower of Cost or Market