If obsolete or damaged goods can be sold, they will be included in inventory at their net realizable value if it is less than cost.

Question

Quizplus · Accepted Answer

This is in accordance with the Generally Accepted Accounting Principles (GAAP) which require inventory to be valued at the lower of cost or net realizable value. If the net realizable value is lower than the cost, the inventory should be written down to its net realizable value.

If Obsolete or Damaged Goods Can Be Sold, They Will