IFRS defines net realizable value for lower-of-cost-or net realizable value as

Question

Quizplus · Accepted Answer

Net realizable value for lower-of-cost-or-net realizable value is the estimated selling price less the costs incurred to complete and sell the item. This means that if the net realizable value falls below the cost of the item, the item's value should be written down to its net realizable value. This is done in order to provide an accurate representation of the company's financial situation by recognizing losses that may arise from a decline in market value or selling price.

IFRS Defines Net Realizable Value for Lower-Of-Cost-Or Net Realizable Value