If a company applies the lower-of-cost-or-market rule to the entire stock of inventory in the aggregate, its write-down of inventory is likely to be greater than if it applies the rule to individual items of inventory.
Answer the following statement true (T) or false (F)
False
If a company applies the lower-of-cost-or-market rule to the entire stock of inventory in the aggregate, items of inventory with higher market values compared to cost will offset items with lower market values. As a result, the write-down is likely to be lower, if it is needed at all.
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