In any industry, the value of a stock ( i.e ) raw materials, finished goods and merchandise tends to vary day by day and the value will be up and down from the Purchase Cost / Manufacturing Cost.

Hence when a claim arises the Insurance Company / Surveyor used to find out the cost of raw materials / Finished Goods / Merchandise from the market condition and consider that only as the cost and arrive at the loss.

Hence the value of a stock at the time of loss will be considered only on the “Market Value “ and not on the purchase cost alone