IFES require that inventories be re

IFES require that inventories be reported at the lower of their cost or market value. In the application of this rule, the word cost includes any of the common cost flow assumptions that have been discussed. The term market value means replacement cost, within certain limits. The limits on the use of replacement cost as market value, and other details of this area of external financial reporting. are discussed and illustrated in intermediate and advanced financial accounting textbooks.