Explain Why Some Companies Carry Their Inventories at NRV Minus

question 150

Essay

Explain why some companies carry their inventories at NRV minus an estimated operating income margin instead of the NRV itself.

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Definitions:

Repression

In psychoanalytic theory, the unconscious exclusion of painful impulses, desires, or fears from the conscious mind.

Defense Mechanism

psychological strategies brought into play by the unconscious mind to manipulate, deny, or distort reality in order to defend against feelings of anxiety and unacceptable impulses.

Repression

A defense mechanism where distressing thoughts and feelings are unconsciously blocked from conscious awareness.

Pervasive

Having the tendency to spread widely throughout an area or group of people.