Under ASPE, agricultural produce, forest products, and mineral products inventories may be accounted for at net realizable value if
A) there is a well-established industry practice of doing so.
B) arbitrary cost allocation would be too costly.
C) costs to bring them to market are expected to be minimal.
D) the company's financial results appear more favourable by doing so.

Question

Quizplus · Accepted Answer

Under ASPE, agricultural produce, forest products, and mineral products inventories may be accounted for at net realizable value if there is a well-established industry practice of doing so. This means that if other companies in the industry are valuing their inventories at net realizable value, it would be appropriate for a company to do so as well. This ensures that the company's financial statements are comparable to those of others in the same industry.

Under ASPE, Agricultural Produce, Forest Products, and Mineral Products Inventories