The U.S. IRS recently published an updated practice unit on inventory valuation methods, Lower of Cost or Market (LCM). The general overview of the practice unit includes the following: Lower of Cost or Market (LCM) There are two tests under IRC 471 that each taxpayer's inventory must satisfy: It must conform as nearly as may be to the best accounting practice in the trade or business of the taxpayer, and It must clearly reflect income. Any taxpayer whose income producing factors are producing, purchasing, or selling of merchandise must take inventory at the beginning and ending of the taxable year...