When the cost of the inventory exceeds the expected benefits, between the LCM & LCNRV method, which one is better and why? What financial statement does it reflect?

When the cost of the inventory exceeds the expected benefits, between the LCM & LCNRV method, which one is better and why? What financial statement does it reflect?




Answer: When the cost of the inventory exceeds the expected benefits, the lower market value is a better measure of the expected benefits because an unrecoverable cost is not an asset. Should be applied to the income statement.


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