The LCNRV basis of valuing inventories is an example of

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LCNRV (lower of cost or net realizable value) is a method of inventory valuation that shows conservatism. The principle of conservatism dictates that companies should choose the option that leads to lower profits and lower assets, which reduces the risk of overstating the company's financial position. The LCNRV method is used when the net realizable value of inventory is lower than its cost, indicating a decline in market value. The principle of conservatism is in contrast to the historical cost principle, which is based on the original cost of the asset. Comparability and consistency are not specifically related to the LCNRV inventory valuation method.

The LCNRV Basis of Valuing Inventories Is an Example of