Glossary · Reading the business
In short
This is an accounting principle for valuing inventory or assets. You record the asset at whichever amount is less: its original cost or its current market value.
This principle is important when evaluating the inventory or equipment included in an asset purchase. If market values have declined, the recorded value on the balance sheet might be overstated compared to its true worth. During due diligence, confirm inventory valuation aligns with this conservative approach.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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