Is the inventory value in the statements of listed real estate companies the current market price or the initial land purchase price?

According to the historical cost principle, the inventory value of real estate listed companies is the initial land purchase price. If the current market price is lower than the initial land purchase price, the inventory depreciation reserve shall be accrued. From the perspective of accounting theory, among current assets, the characteristics of inventory determine that its liquidity and security risks are high. Accounting methods need to reflect the risk of inventory. The value of inventory is affected by market price fluctuation or physical damage and cannot be realized at historical cost, so there is a gap between the book value of inventory reflected at historical cost and the actual value of inventory. Reflecting the value gap of this nature through accounting treatment can be beneficial to the capital flow of enterprises, and can also urge enterprises to pay close attention to the market and minimize the loss of inventory value. The solution is a low method between cost and market price. When the net realizable value of inventory is lower than the cost, the resulting loss does not meet the definition of assets, so this part of the loss should be deducted from the inventory value and included in the current profit and loss. Otherwise, when the net realizable value of inventory is lower than its cost price, the book value reflected by historical cost will form virtual assets, leading to the distortion of accounting information. Therefore, when one of the following circumstances exists, the company should make provision for inventory depreciation: 1, the market price continues to fall, and there is no hope of recovery in the foreseeable future; 2. The cost of the product produced by the enterprise using this raw material is greater than the sales price of the product; 3. Due to product upgrading, the original raw materials in stock can no longer meet the demand of new products, and the market price of raw materials is lower than its book cost; 4. Market demand changes due to outdated goods or services provided by enterprises or changes in consumer preferences, resulting in a gradual decline in market prices; 5. Other circumstances sufficient to prove that the inventory has suffered significant impairment.