At year-end, management estimates that inventory obsolescence losses of ₹900,000 are probable and can be reliably measured. How should this be accounted for?
AWrite down inventories by ₹900,000 to net realizable value through cost of sales
BRecord an inventory obsolescence loss of ₹900,000 as a separate line item in the income statement.
CDo not recognize any loss until the inventory is actually sold or written off.
DIncrease the carrying amount of inventories by ₹900,000 to reflect the estimated loss.