Final answer:
GAAP requires that inventory should be reported at the lower of cost or net realizable value, not at net realizable value when above cost, making the statement false.
Step-by-step explanation:
The statement that GAAP requires reporting inventory at net realizable value, even if above cost, whenever there is a controlled market with a quoted price applicable to all quantities is false. Generally Accepted Accounting Principles (GAAP) mandate that inventory should be reported at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business minus reasonably predictable costs of completion, disposal, and transportation. The conservatism principle of accounting guides this requirement, ensuring that inventories are not overvalued on the balance sheet. This methodology helps in avoiding the overstatement of financial health and profitability in cases where market values have declined below historical costs.