Which of the following is true regarding the remeasurement of inventories upward to an amount exceeding their acquisition cost?
A)Acquisition cost leads to a more conservative measure of inventories and net income during the periods prior to sale.
B)An increase in the market value of inventory likely permits the firm to raise its selling price.
C)The firm realizes the benefit of that increase in the period of sale when the firm actually obtains a higher selling price.
D)Both U.S.GAAP and IFRS delay recognition of any increase in inventory valuation in net income until the period of sale.
E)all of the above

Question

Quizplus · Accepted Answer

All the statements provided are true regarding the remeasurement of inventories upward. A) highlights the conservative approach of acquisition cost, B) and C) discuss the potential for increased selling prices and the realization of benefits, and D) notes the accounting treatment under both U.S. GAAP and IFRS, which delays recognition of inventory valuation increases until the sale occurs.

Which of the Following Is True Regarding the Remeasurement of Inventories