For interim reports, an inventory loss from a temporary market decline in the first quarter, which may reasonably be expected to be restored in the fourth quarter, is:

Question

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Under accounting principles, if an inventory loss from a temporary market decline in the first quarter is expected to be restored by the end of the year, it is not recognized as a loss in the interim reports of the first quarter. This approach avoids recognizing a loss that is expected to be recovered within the same fiscal year.

For Interim Reports, an Inventory Loss from a Temporary Market