When the net realizable value for all of the subsequent period. Due to a certain circumstances the inventories of the company needs to be written down below the cost that no longer exists or with the evidence related to the net realizable value caused as a result of the changed economic circumstances (Walton & Aerts, 2006, p.120). This leads to the reversing of the write-down where the amount if restricted to original write-down, so much so, the new carrying amount of the company will be lower than the revised net realizable value along with its associated cost. With the selling of the inventories the carrying cost of the inventories is treated as the expense in the period in which the revenue is recognized. This result in the written down value of the inventory is considered as the cost or occurrence of losses. The concept of reversal write-down value generally occurs from the increase in the net realizable value of the concerned company; which is recognized as a fall in the amount of inventory as an expense in the period of reversal write-down occurrence (Johnston & Johnston, 2005, pp.62-63).
The concepts of the reversal write-down under the Australian Accounting Standards will have a great impact on the current situation of BHP Billiton’s US Shale Gas assets related to the financial statements of the company. The inventory cost of the company will reduce thus reducing the carrying cost of the Shale Gas assets to a remarkable extent. Thus the increase in the net realizable value of the company will be projected at a low rate than now. This in turn will lower the intrinsic value of the company resulting in the valuation of the company being similar to the market value of the company or lower than the market value. Hence the company will be in the condition to revive of the present condition to a certain extent (Australian Government, 2009, p.17).
The income and the deferred tax of the