When the sales value of the inventory subsequently increases after a write down to net-realizable-value the reported value may be increased to the limit of the original cost.

Question

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According to accounting principles, if the market value of inventory increases after a write-down, the value of the inventory can be written back up, but only to the extent of the original cost before the write-down. This adjustment is made to avoid reporting inventory at an amount greater than what it cost to acquire or produce it.

When the Sales Value of the Inventory Subsequently Increases After