Wing Tai Holdings

[Musicwhiz]

Hi accounting experts,

Property development costs is recognised as the lower of cost and net realisable value. Can someone do a little elaboration of what this means?

Thanks in advance.

In accounting lanaguage, is there a difference if it is phrased as
'Property development costs is recognised as the lower of cost OR net realisable value. '

Development costs should technically be capitalized under Fixed Assets.

Whereas inventory is usually stated at lower of cost of NRV. This is due to the prudence principle. Do not under-state liabilities and over-state assets.