CERTYNEX IFRS ACADEMY

Which of the following situations, observed at the year-end at a garden equipment distributor, leads to the reversal of a write-down of inventories?

For its lawnmowers, the distributor replaces the first-in, first-out (FIFO) formula with the weighted average cost formula.

The selling price of lawnmowers still in inventory, written down last year after a fall in that price, rises because of a change in economic circumstances.

The net realisable value of leaf blowers that were never written down now far exceeds their cost, which would justify carrying them at that higher value.

The purchase cost of new batches of hedge trimmers rises sharply, while their selling price stays unchanged.