( Accounting : Financial statements )
When the value of the inventory has declined below its cost, a firm may choose the lower of cost or market method.
If the cost of replacing inventory is lower than its recorded purchase cost, the lower-of-cost-or-market method is used to value the inventory.
Lower of cost or market is a method of valuing assets where the asset is valued at either the historical
cost or the fair market value, whichever is lower.
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