Income method.

• Jurisdiction: United States
• Author: Heitritter, Wilfred H.
• Date: 01 April 1999

According to Rev. Proc. 77-12, the income method values inventory at an amount that would allow a purchaser to pay the costs of the inventory's disposition and provide an adequate return on the purchaser's investment when the inventory is sold. This method is similar to the comparative sales method, but adds a seller's profit to the inventory's reproduction cost; the comparative sales method subtracts costs of disposition and a purchaser's profit from the inventory's sales price.

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