When Applying the Lower of Cost and Net Realizable Value

question 113

Essay

When applying the lower of cost and net realizable value (NRV) of inventory valuation, NRV is defined as the estimated _____________________ in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

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Definitions:

First-Level Outcomes

Initial results or effects of an action or decision, often serving as the immediate impacts before more complex or long-term outcomes emerge.

Second-Level Outcomes

Refers to the indirect or long-term results of an action or decision, beyond the immediate or primary effects.

Expectancy Model

A psychological theory that explains motivation as a function of individuals' expectations about their ability to perform tasks, the expected outcomes of these tasks, and the value they place on these outcomes.

Valence

refers to the intrinsic attractiveness or aversiveness of an event, object, or situation.