Manufacturing
Inventory Write-down to Net Realizable Value (NRV)
Adjusting the value of finished goods when the market price falls below the production cost.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cost of Goods Sold (or Loss) | Expense (+) | 2,000.00 | - |
| Finished Goods Inventory | Asset (-) | - | 2,000.00 |
💡 Accountant's Note
Under IAS 2, inventory must be reported at the lower of cost or NRV. If you can't sell the product for more than it cost to make, you must take the loss immediately.
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