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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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THATS SO FUNNY
i cant i would go crazy
JumpySubsequentDolphin
20:50
i need to know who decided to do that.
JumpySubsequentDolphin
20:50
omg im on a plane weeeee
the devil
youre on a plane??? LSD made the mile high club??
20:50
yo splitterus are you in school already
20:50
it says ur c/o 2027
JumpySubsequentDolphin
20:51
@SplitterusClitterus: HAHAH yes
ur user is hilarioussss and no i just graduated this may and am now applying ---also im out of messages so ill take a lil
20:52
roger dat. see u in heck
im back, r u applying this cycle too
JumpySubsequentDolphin
21:32
this child fell asleep on me
JumpySubsequentDolphin
21:32
im so uncomfortable
just push him off the entire seat
JumpySubsequentDolphin
21:34
LMAOOOO
JumpySubsequentDolphin
21:35
no he’s literally like 8 and he fully just put his head on my bicep and slept
JumpySubsequentDolphin
21:35
he has since moved
22:12
@SplitterusClitterus: me yesterday
gulc baby pls text me back... i miss you ...... :(
22:23
i just went into a discord vc and yelled "YALL I JUST GOT INTO J.M. SCHOOL OF LAW"
22:24
people were getting excited :sob:
22:25
then someone was like "what does jm stand for" and i was like .. well
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JumpySubsequentDolphin
22:39
@splitty Oregon!
oh yay for what thats so random
JumpySubsequentDolphin
22:45
haha my brother and sister in law live there
so cutie oregon is beatiful
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