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Are we able to carry out an impairment test on inventory should the recoverable amount fall below cost/ carrying amount?
Inventory is counted and evaluated once each year (or as many times as ‘accurate’ financial statements are prepared)
The valuation is carried out on, typically, a fifo basis
Inventory is carried at the lower of cost and net realisable value
If any write down were appropriate, it would manifest itself automatically in the evaluation process
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