All of the following statements are true except:
A) IFRS uses net realizable value with no upper or lower limits imposed.
B) Both U.S.GAAP and international financial reporting standards (IFRS) require the use of the lower-of-cost-or-market rule to value inventories.
C) Write-downs of inventory can be reversed in later periods under U.S.GAAP.
D) U.S.GAAP defines market value as replacement cost.

Question

Quizplus · Accepted Answer

Under U.S. GAAP, once inventory has been written down, any subsequent recovery in value cannot be recognized. This contrasts with IFRS, which does allow for reversals of inventory write-downs in certain situations.

All of the Following Statements Are True Except