求解以下的问题.最好用中文解释.谢谢1.Lower of cost and NRV2.Explain when revenue and expenses recognised under accrual accounting vs cash accounting3.Explain contra accounts and give examples4.Why would allowance for DD ever have a DR balance? explain5.Contingent liabilities (to report or not)....
lower of cost and NRV Applied to items什么意思？成本与可变现净值孰低
When inventory is written down to market, the replacement cost of the inventory is its market value, but the "market value" must fall between net realizable value (NRV) and NRV less normal profit margin. NRV is the market price of the inventory less selling costs. Therefore the minimum valu...
Upper Limit: NRV = 980 − 40 = $940 Replacement Cost = $880 Lower Limit: NRV − Normal Profit = 940 − (980 − 880) = $840Since the replacement cost of $880 lies within the limits set by LCM rule, it is allowable market value of the inventory. This market value is to ...
izablevalue(NRV)referstothenetamountthatacompanyexpectstorealizefrom thesaleofinventory.Specifically,netrealizablevalueistheestimatedsellingpricein thenormalcourseofbusinesslessestimatedcoststocompleteandestimatedcoststo makeasale.[1] Toillustrate,assumethatManderCorp.hasunfinishedinventorywithacostof ...
The replacement cost cannot exceed thenet realizable value (NRV). The replacement cost cannot be lower than net realizable value less a normal profit margin. Net realizable value is the sale price of the inventory minus any costs incurred to prepare the inventory for sale. A normal profit margi...
1. At the end of each period, inventory is measured at the lower of cost or market. 2. Market = Current replacement cost 3. If current replacement cost > Net realizable value (NRV) of inventory, then Market = Net realizable value (NRV) of inventory ...
Net Realizable Value (NRV): Net realizable value is the current market selling price of the asset, minus any costs for selling, disposing of, or otherwise getting rid of the asset. Market Value This value is the Market Value figure to compare with "cost" when applying the LCM rule. For ...
Inventory should be measured at the lower of cost and net realizable value. If the net realizable value is lower than the cost, the difference between the two should be treated as a loss and the inventory account should be written down....
Historical cost refers to the cost of inventory at the time it was originally purchased. The LCM method takes into account that the value of a good can fluctuate. Under this scenario, if the price at which the inventory may be sold dips below the net realizable value (NRV) of the item,...