Low-price principle

Japanese: 低価主義 - ていかしゅぎ

It is an accounting method for valuing inventory at the end of a period. The amount listed on the balance sheet is determined by comparing the acquisition cost with market value (net realizable value or replacement value), whichever is lower. It reflects the accounting conservatism of recording anticipated losses on the sale of goods in the next period in the current period, and is permitted by the Commercial Code and Tax Law. The method using acquisition cost is called the historical cost method, while the method using market value at the time of valuation is called the market value method. → Inventory sheet / acquisition cost method / market value method

Source : Heibonsha Encyclopedia About MyPedia Information

Japanese:

期末棚卸資産の会計的評価方法の一つ。取得原価と時価（正味実現可能価額または取替時価）とを比較していずれか低いほうで貸借対照表記載価額をきめること。次期に予想される商品の売買損失を当期に計上する会計上の保守主義の反映であり，商法や税法でも認められている。取得原価による方法を原価主義，評価時点の時価による方法を時価主義という。→棚卸表／取得原価主義／時価主義

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