Inventory Accounting
The body of accounting that deals with valuing and accounting for changes in inventoried assets. Changes in value can occur for a number of reasons including depreciation, deterioration, obsolescence, change in customer taste, increased demand, decreased market supply and so on.
Investopedia Commentary
It is a requirement of GAAP that inventory be properly accounted for according to a very particular set of standards, so as to limit the potential of overstating profit by understating inventory value, and to limit the potential to overstate a company's value by overstating the value of inventory which has in fact materially depreciated in value.
Related Links
Inventory Valuation For Investors: FIFO And LIFO
See also: Amortization, Carrying Value, Depreciation, Generally Accepted Accounting Principles - GAAP, Inventory Reserve, Lower of Cost and Market Method, Net Asset Value - NAV, Net Realizable Value - NRV