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An inventory is often defined as the assets that are to be sold in the market or the ones that are being modified to be sold in the market and the products that are to be used in the process of manufacturing goods for final sale. Thus, assets that are intended to be sold as the finished goods are the constituents of an inventory.
As marketable goods are exposed to various market and non-market conditions like inflations, recession, technological obsolescence, damage or impairment etc.; all such effects are intended to be incorporated in the value of inventory on a specific period of time to determine the exact value of inventory.
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