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Worked-example setupScope and assumptions
- Cedar Trail is fictional, and the population methods, selling-price evidence, completion, disposal, transportation, replacement cost, and normal profit are supplied.
- The ordinary item is neither LIFO nor retail-method inventory; the separate market item uses LIFO.
- The example applies US GAAP and does not establish IFRS reversal accounting.
- Period
- One reporting date
- Units
- US dollars
- Rounding
- Display dollars to cents
Build NRV before selecting the path
Cedar's ordinary item has an $800 supported selling price. Completion costs are
$25, disposal costs are $20, and transportation costs are $15. NRV is $800 − $25 − $20 − $15 = $740. The file identifies the item, condition, channel,
date, sources, and owner for each estimate.
Apply direct NRV to the ordinary item
The item costs $780 and uses neither LIFO nor the retail method. Compare cost directly with $740 NRV. Carrying amount is $740, and the write-down is $40.
Apply designated market to the LIFO item
A separate LIFO item costs $950. Its supported NRV and ceiling are $900. Normal profit is $120, so the floor is $780. Replacement cost is $820, inside the range. Designated market is therefore $820, and the write-down is $130.
The calculations do not prove the methods, populations, estimates, application level, or reporting framework. Complete the independent Northstar measurement review.
Verified calculation · scoped sums
The curriculum loader recomputed this example before it entered the site build. Expand any structured input to inspect the stated facts.
- amounts
- 10 fields
Inspect data
{
"market_cost": 950,
"market_designated_market_reduction": -820,
"market_normal_profit": -120,
"market_nrv": 900,
"ordinary_completion_costs": -25,
"ordinary_cost": 780,
"ordinary_disposal_costs": -20,
"ordinary_nrv_reduction": -740,
"ordinary_selling_price": 800,
"ordinary_transportation_costs": -15
}- totals
- 4 fields
Inspect data
{
"market_floor": [
"market_nrv",
"market_normal_profit"
],
"market_write_down": [
"market_cost",
"market_designated_market_reduction"
],
"ordinary_nrv": [
"ordinary_selling_price",
"ordinary_completion_costs",
"ordinary_disposal_costs",
"ordinary_transportation_costs"
],
"ordinary_write_down": [
"ordinary_cost",
"ordinary_nrv_reduction"
]
}Recomputed result
| Measure | Value |
|---|---|
| market floor | 780 |
| market write down | 130 |
| ordinary nrv | 740 |
| ordinary write down | 40 |