According to IAS 2 Inventory, valuation of inventory made at lower of:

  1. Cost
  2. NRV

Is the application of prudence concept, which states the whenever more than one accounting treatment is possible, then organization should one that shows more pessimistic view of organizational performance and position.

Consistency principle, which states that all items of identical or similar nature should be given method treatment.


If one ironing board is measured at net realisable value, then all ironing boards of same specification should be measured at net realisable value.

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