Lower Of Cost Or Market Write Down Checker

Apply declared replacement-cost LCM ceiling/floor model (NRV and NRV−normal-profit) without confusing it with lower-cost-NRV; applicable reporting framework/inventory method remains caller responsibility.

Description

This lower-of-cost-or-market scenario constrains replacement cost between an NRV ceiling and an NRV-minus-normal-profit floor.

This lower-of-cost-or-market scenario constrains replacement cost between an NRV ceiling and an NRV-minus-normal-profit floor. It differs from a direct cost-versus-NRV test.^[1]

The returned values include Market floor minor, Designated market minor, Lower cost or market carrying minor, Inventory write down minor. The How section below explains the calculation, input rules and interpretation.

When to use Lower Of Cost Or Market Write Down Checker

Use Lower Of Cost Or Market Write Down Checker when you need to evaluate the supplied records under the calculation and evidence rules below. No inventory-method or reporting-framework applicability is inferred.

Gather the source balances and explicit accounting policy. Monetary inputs use integer minor units in one currency; for a currency with 100 minor units per major unit, 12345 represents 123.45. One basis point is 0.01 percentage points; 10000 basis points is 100%. Dates and posting signs follow the individual rules below.

How to use Lower Of Cost Or Market Write Down Checker and understand its results

Gather the source balances and explicit accounting policy. Monetary inputs use integer minor units in one currency; for a currency with 100 minor units per major unit, 12345 represents 123.45. One basis point is 0.01 percentage points; 10000 basis points is 100%. Dates and posting signs follow the individual rules below.
Enter recordedCostMinor, replacementCostMinor, nrvCeilingMinor, normalProfitMinor using the field table and calculation rules, then run the tool.
Read marketFloorMinor, designatedMarketMinor, lowerCostOrMarketCarryingMinor, inventoryWriteDownMinor. The explanation below defines the units, signs, ordering and any flags or placeholder values.
If the tool reports an input issue, correct the values and run it again. Apply the stated assumptions when interpreting a successfully returned result.

Input field	Meaning	Value type; see rules below	Requirement
recordedCostMinor	Recorded cost minor	number	Required
replacementCostMinor	Replacement cost minor	number	Required
nrvCeilingMinor	Nrv ceiling minor	number	Required
normalProfitMinor	Normal profit minor	number	Required

Enter nonnegative safe-integer money for recorded cost, replacement cost, net realizable value (NRV) and normal profit. Require normal profit≤NRV. Return floor, designated market, carrying value and recorded-cost-minus-carrying write-down.

floor=NRV−normalProfit; market=max(floor,min(replacement,NRV)); carrying=min(recordedCost,market)

Units, indexing, boundary conditions and exceptional cases are defined in the calculation rules above.

Output field	Meaning	Value type
marketFloorMinor	Market floor minor	number
designatedMarketMinor	Designated market minor	number
lowerCostOrMarketCarryingMinor	Lower cost or market carrying minor	number
inventoryWriteDownMinor	Inventory write down minor	number

json

{
  "input": {
    "recordedCostMinor": 100,
    "replacementCostMinor": 60,
    "nrvCeilingMinor": 80,
    "normalProfitMinor": 10
  },
  "output": {
    "marketFloorMinor": 70,
    "designatedMarketMinor": 70,
    "lowerCostOrMarketCarryingMinor": 70,
    "inventoryWriteDownMinor": 30
  }
}

Limitations and assumptions

No inventory-method or reporting-framework applicability is inferred.

Numeric inputs, where present, must be finite. Follow the calculation-specific rules for overflow, underflow and exceptional cases. Missing fields without a declared default, extra fields, wrong value types and violations of the calculation rules are input errors.

Alternative or Complementary methods

Use NRV Lower Of Cost NRV Inventory Test Tool: Net realizable value subtracts completion and selling costs from expected selling price. Inventory carrying value uses lower cost or NRV with a zero floor. For a complementary task, use Impairment Loss Recoverability One Step Test Tool: A one-step impairment scenario compares carrying value with the higher of two independently measured recovery values. An undiscounted-cash screening gate is absent.

References

Lower Of Cost Or Market Write Down Checker — tool.io

Similar or alternative tools

NRV Lower Of Cost NRV Inventory Test Tool
Net realizable value subtracts completion and selling costs from expected selling price. Inventory carrying value uses lower cost or NRV with a zero floor.
Impairment Loss Recoverability One Step Test Tool
A one-step impairment scenario compares carrying value with the higher of two independently measured recovery values. An undiscounted-cash screening gate is absent.