Question

A repair parts inventory for claim servicing includes

Q: Answer-A repair parts inventory for claim servicing includes slow-moving items. NRV has fallen for some SKU...

NRV is assessed item-wise or by similar items offsetting with unrelated items isnt allowed.

slow-moving items. NRV has fallen for some SKUs, while others have long lead times. Can management offset NRV write-downs with expected price recoveries on fast-moving SKUs?

A Yes, if within same warehouse

B Yes, if same supplier

C No, write-downs are item-specific or by homogeneous groups

D Yes, because risks are pooled in insurance

E No, inventory write-ups are prohibited in all cases

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A repair parts inventory for claim servicing includes

Solution