Final answer:
False Companies generally must use recognized inventory valuation methods, and may only value inventories at net realizable value if they are expected to be sold for less than production cost.
Step-by-step explanation:
It is false that companies may value inventories at net realizable value if cost is too difficult to determine. Generally, companies must use one of the recognized valuation methods (such as FIFO, LIFO, or weighted average cost) to determine the cost of inventory.
However, if inventories are expected to be sold for less than it cost to produce them, due to damage, obsolescence, or other factors, they may then be written down to net realizable value, which represents the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.