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Simple English definitions for legal terms

lower-of-cost-or-market method

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A quick definition of lower-of-cost-or-market method:

The lower-of-cost-or-market method is a way to determine the value of inventory. It means that the inventory is priced at either the cost of acquiring it or the current market value, whichever is lower. This helps ensure that the inventory is not overvalued and reflects its true worth.

A more thorough explanation:

The lower-of-cost-or-market method is a way of pricing or costing inventory. This method sets the value of inventory at either the cost of acquiring it or the market cost, whichever is lower.

For example, let's say a company has 100 units of a product in inventory. They purchased these units for $10 each, so the total cost of the inventory is $1,000. However, the market value of the product has decreased and is now only $8 per unit. Using the lower-of-cost-or-market method, the company would value their inventory at $800 (100 units x $8 per unit) instead of the original cost of $1,000.

Another example would be if a company has 50 units of a product in inventory. They purchased these units for $20 each, so the total cost of the inventory is $1,000. However, due to a decrease in demand, the market value of the product has decreased and is now only $15 per unit. Using the lower-of-cost-or-market method, the company would value their inventory at $750 (50 units x $15 per unit) instead of the original cost of $1,000.

The lower-of-cost-or-market method is used to ensure that inventory is not overvalued on a company's balance sheet. It is a conservative approach that takes into account any decreases in market value that may occur after inventory has been purchased.

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medicine is a scam
join the ethically ambiguous legal field instead
Dkk
18:57
I want to meet an attorney that defends clients who run into flat earth problems. I want an attorney that knows and believes in flat earth theory.
19:05
i want a flat earther for president. i want a guy who posts on 4chan for president. i want someone who mogs for president.
Dkk
19:18
Exactly. My version of that awful poem.
Dkk
19:19
I can accept a president with maybe one or two of the poems traits hut good God, all of them??? No ty.
windyMagician
19:20
president who respects sex is crazy
windyMagician
19:20
we had bill clinton already
Dkk
19:21
Bill Clinton, first and last black president
windyMagician
19:23
I want to go running but my leg feels weird
windyMagician
19:23
it doesn't hurt its just tingly
Dkk
19:26
It needs more alcohol. You tingle when your nerves need watering.
19:27
try stretching it maybe to see what's up
windyMagician
19:27
stretches make me think it's just soreness
windyMagician
19:27
I'm sober lol
Dkk
19:38
Anyone else get the google notification that your LSD password has been compromised lol. LSD got hacked.
20:48
what.jpg @Dkk
CynicalOops
21:03
You think you just fell out of a coconut tree?
jackfrost11770
21:10
nope dk
CynicalOops
22:37
Calvinamala Harris
jackfrost11770
23:16
should i start using letterboxed again
Dkk
23:25
@jackfrost11770: if you want but like it aint for me
dk do u ever eat at bk
Dkk
23:48
@chickenburgahfart: I would do that in the Army if really desperate for food or if I had to work through lunch. One of the few fast food places I go to.
bk so slept on
Dkk
0:23
I will take In N Out everyday over it when I can though.
texaslawhopefully
1:22
In N Out is not only the best fast food place, but the prices too are fantastic
Dkk
1:27
Indeed, indeed.
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