Final answer:
Under US GAAP, inventory write-downs can be reversed up to the amount of the original write-down.
Step-by-step explanation:
The statement ‘US GAAP do not permit inventory write-downs to be reversed’ is False.
Under US GAAP (Generally Accepted Accounting Principles), when a company determines that the value of its inventory has permanently declined, it is required to write-down the inventory to its lower market value. However, if in the future the market value of the inventory increases, US GAAP does allow the write-down to be reversed, but only up to the amount of the original write-down.
For example, if a company initially wrote-down its inventory by $10,000, it can later reverse the write-down if the market value of inventory increases by $10,000 or less.