Lower of Cost or Market

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At the end of an accounting period, a convention used to mark the current value of remaining inventory. Under this convention, the inventory is recorded as either the historical cost (what the company originally paid) or the fair market value (what the inventory is now worth), whichever is lower. A company does this in order to minimize its tax liability.

lower of cost or market

A method for determining an asset's value such that either the original cost or the current replacement cost, whichever is lowest, is used for financial reporting purposes. For example, an inventory item originally purchased for $50 that has a current market value of $30 would appear on the firm's balance sheet at $30. The use of lower of cost or market is considered a conservative method of valuing assets.

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FIFO First In, First Out Lower of Cost and Market Method			For real-estate loans, LTV is expressed as the lower of cost or market. Shopping for a commercial loan? Not all loans are created equal by Young, Steven M. / Indiana Business Magazine Under the CAV method, remanufacturers and resellers value cores at the lower of cost or market (LCM). Safe-harbor method to determine market value of motor vehicle cores by Smith, Annette B. / The Tax Adviser A taxpayer electing LIFO must also agree to discontinue use of the lower of cost or market pricing technique ("LOCOM"). Tax savings potential by Booth, James P. / Tea & Coffee Trade Journal			Low Balance Method Low Ball Low Grade Low Income Low Price Low Price-Earnings Ratio Effect Low Profit Limited Liability Company Low-Ball Offer Low-Content Culture Low-Coupon Bond Refunding Low-Grade low-income housing Low-Income Housing Limited Partnership low-income housing limited partnerships Low-Income Housing Tax Credit low-income housing tax credits Low-Key Lighting Low-Load Fund Low-Price Strategy low-rise Low-Tech Lowball Lower Deck Containers Lower Middle Class Lower of Cost and Market Method Lower of Cost or Market Lower Rate of Income Tax Lows Loyalty Program LP LR LRD LS LSE LSL LT Ltd. LTL LTV LU Luca Pacioli Lucas Critique Lucro Lucro bruto Lucro da Exploracao Lucro eventual Lucro liquido Lucro nao distribuido Lucro realizado Lucros retidos Luddite			Lower motor neurone lesion Lower motor neurones Lower motor neurones Lower motor neurons Lower motor neurons Lower Mount Bethel Energy Lower Mount Bethel Township Lower Mountain Fork River Foundation Lower Mountains Family Support Service Lower Mt Auburn Lower Murray Darling Catchment Management Authority Lower Murray Irrigation Action Group Lower Murray Reclaimed Irrigation Area Lower Naugatuck Valley Lower Neches Valley Authority Lower Nehalem Watershed Council lower nephron nephrosis lower nephron nephrosis lower nephron nephrosis lower nephron nephrosis Lower Neuse Basin Association Lower Niagara River Region Chamber of Commerce Lower Nicola Indian Band Lower Normandy Lower Normandy Lower North Atlantic Deep Water Lower North Community Health Service Lower North Thompson Community Forest Society Lower North Volunteer Resource Centre Lower of Cost and Market Method Lower of Cost or Market Lower of Cost or Net Realizable Value Lower Olefins Sector Group Lower One lower oneself lower oneself lower oneself to some level Lower Open Auxiliary Lower Operating Limit Lower Order Concern Lower Order Mode Lower Order Path Lower Order Virtual Containers Lower Ordovician Lower Ottawa Valley Lower Ouse Internal Drainage Board Lower Owens River Project lower pair Lower Palaeolithic Lower Palatinate Lower Palatinate Lower Paleolithic Lower Paleolithic Lower Paleozoic Lower Paleozoic Lower Parel Lower Parts Kit Lower Paxton Aquatic Club Lower Paxton Township

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