Stock valuation

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Closing Stock is Valued at 'COST Price' or 'MARKET Price' whichever is LESS... why ?

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Paragraph 5-measurement of inventories. The valuation of inventory at lower of cost and net realisable value is based on the view that "no asset should be carried at a value which is in excess of the value realisable by its sale or use" Accounting policy-"prudence" is applied here..


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