The Lower of cost and net realizable value (LC&NRV)rule sometimes causes the book value of inventory to be lowered below cost but will never cause the book value of inventory to be raised above cost.
BT: Comprehension

Question

Quizplus · Accepted Answer

The statement correctly describes the LC&NRV rule. It allows inventory to be written down to its net realizable value if that value is lower than its historical cost. However, if the net realizable value later increases, the book value of inventory cannot be written back up above cost.

The Lower of Cost and Net Realizable Value (LC&NRV)rule Sometimes