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Answer: 3,300, representing the lower of cost and net realizable value under IFRS.
### Explanation **Option C is correct** because under **IFRS**, inventories are measured at the **lower of cost and net realizable value (NRV)**. In this case: - **Cost of ending inventory**: €3,600 - **Net realizable value**: €3,300 The lower of the two values is €3,300, which is the amount at which the inventory should be carried on the balance sheet. **Option A is incorrect** because it assumes the company reports under **US GAAP** and uses the **LIFO inventory valuation method**, where the lower limit of market value is net realizable value less a normal profit margin (€3,100). However, this does not apply under IFRS. **Option B is incorrect** because it also assumes **US GAAP** and uses the **LIFO method**, where market value is defined as current replacement cost (€3,200) subject to upper (NRV) and lower (NRV less profit margin) limits. This is not relevant under IFRS.
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An analyst gathers the following information (in € thousands) about an electronics manufacturing company's inventory: Cost of ending inventory: 3,600 Net realizable value: 3,300 Current replacement cost: 3,200 Net realizable value less a normal profit margin: 3,100 The inventory (in € thousands) is carried on the balance sheet at:
A
3,100, representing the lower of cost and net realizable value less a normal profit margin under US GAAP.
B
3,200, representing the lower of cost and current replacement cost under US GAAP, subject to upper and lower limits.
C
3,300, representing the lower of cost and net realizable value under IFRS.
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