Question

valuation of inventories is governed by​

Answer 1

This accounting standard is applicable to all companies irrespective of their level (Level I, II and III). This standard prescribes the accounting treatment for inventories and sets the guidelines to determine the value at which the inventories are carried in the financial statements.

Basics of Inventory Valuation

The LCM rule simply states that when you calculate the value of inventory, you should price lower than either its purchase price or current market value. If an item declines in market value since its purchase, the inventory valuation should depreciate accordingly.