· Pure paper gains that occur through changes in the market price should be avoided. For example, if a material is procured at a price of $10, and the current market price is $15, then the expected gain for each unit of measure is $5. However, this gain should only be entered in the financial statements when it is actually realized. Therefore the material is still valuated at $10.

· Expected losses should be entered in the financial statements. For example, if a procured material has a price of $10 and the actual market price is $7, then you should valuate the material at $7.

· You should, in fact, view material stocks as having reduced in value when they are no longer needed. Therefore, a material is examined according to its movement rate or its range of coverage. A low movement rate or a large range of coverage probably means that the material will not be needed in the future. In order to avoid having to post the entire loss at the time when the material is taken out of the accounts (e.g. it is scrapped), the value of a material is written down as soon as a low movement rate or high range of coverage is detected.