If the historical cost of inventory falls below replacement cost,the business must write down the inventory cost.

Question

Quizplus · Accepted Answer

According to generally accepted accounting principles (GAAP), if the historical cost of inventory is less than the replacement cost, there is no need to write down the inventory cost. Write-downs typically occur when the market value falls below the historical cost, not the other way around.

If the Historical Cost of Inventory Falls Below Replacement Cost,the