① The net realizable value of a merchandise inventories for direct sale such as a finished goods, a commodity and a material for sale is its estimated selling price minus estimated selling expenses and taxes under normal production and management.② The net realizable value of a material inventory to be processed is the estimated selling price of the finished goods made of the material minus the prospective costs, selling expenses and taxes upon completion under normal production and management.③ In case the price of part of an inventory’s is agreed in the contract but the other parts under the same item is not agreed in the contract by the date of balance sheet, the net realizable value shall be confirmed separately and compared with the corresponding costs to confirm the amount of inventory revaluation reserve.