You Decide: Should inventory be recorded at cost or fair market value?

You recently ran into Bill Autograph, a friend from high school who has been really busy getting his sports collectible/memorabilia business off the ground. When he heard you were an accountant, he became very interested and wanted you to clarify something. One concept he seemed particularly confused about was the fact that when inventory is purchased, it is recorded on the books at cost but the books are not adjusted for subsequent increases in the value of the inventory. This concept is of particular importance to Bill because he often buys collectibles that will increase in value depending on how successful a particular player or team becomes. Can he record increases in the value of his sports memorabilia inventory?