Retain records to permit auditors to verify such adjustments. Periodic inventory accounting system. Under the periodic inventory method, items are received and issued without being added to or subtracted from the inventory totals. A physical count is required to provide the number of items in the inventory. See Section IV.E below.
Inventories are to be recorded at the lower of cost or market price.
Value of farm and livestock inventories. Farm inventories - Purchased farm products will be valued at purchase price. Where purchase price or cost allocation data is not available, market value less an estimated cost of delivery from farm to market may be used with an explanation attached. Livestock inventories - Value livestock inventories at the lower of cost or market. Methods described below are applicable to raised livestock, purchased animals raised to maturity, and to the valuation of different classes of animals.