Inventory Carrying Amount

CFA Level I
#1

In the event that the value of inventory declines below the carrying amount on the balance sheet, the inventory carrying amount must be written down to its net realisable value

(Institute 416)

Institute, CFA. 2016 CFA Level I Volume 3 Financial Reporting and Analysis. CFA Institute, 07/2015. VitalBook file.

The citation provided is a guideline. Please check each citation for accuracy before use.

Under IFRS shouldn’t we be writing down to the lower of NRV or cost rather than just NRV? Or is carrying amount = cost which would make that statement make sense.

#2

Originally, carrying amount is cost. But it might be lower than cost if you’ve written down the inventory previously.