In this article we will discuss about Lower of Cost or Market (LCM) Rule:- 1. Subject Matter of Lower of Cost or Market (LCM) Rule 2. Arguments in Support of LCM Rule 3. Criticism. Subject Matter of Lower of Cost or Market (LCM) Rule: The different methods of inventory costing such as FIFO, LIFO determine the value of inventory in [...]
In this article we will discuss about Inventory:- 1. Meaning of Inventory 2. Need for Inventories 3. Objectives for Measurement 4. Methods of Costing 5. Consistency in the Valuation 6. Accounting 7. Consequences of the Choice of Inventory Methods. Contents: Meaning of Inventory Need for Inventories Objectives for Measurement of Inventories Methods of Inventory Costing Consistency in the Valuation of [...]
AS-2 has advocated to value inventories at the lower of historical cost and net realisable value. It comments: "Inventories are held in the expectation of deriving revenue directly or indirectly from their sale or use. In order to determine the results of a business for a given period, it is necessary to carry forward the cost related to inventories until [...]