In a recent annual report, Kaiser Aluminum Corporation made the following statement in reference to its inventories: "The company recorded pretax charges of approximately 19.4 million because of a reduction in the carrying values of its inventories caused principally by prevailing lower prices for alumina, primary aluminum, and fabricated products." What basic accounting principle caused Kaiser Aluminum to record this 19.4 million pretax charge? Briefly describe the rationale for this principle.