Current assets must be stated at purchase or manufacturing cost
and written down to the lower of cost or market value. A write-
down is only permissible for tax purposes where the diminution
in the value of the asset is deemed to be permanent. If the value
of the asset subsequently increases, write-ups are in general
mandatory in the tax and commercial accounts.
For commercial accounting purposes, provisions must be creat-
ed for liabilities of an uncertain nature and for anticipated losses
on transactions in the course of completion.