Something I have come across is an opinion that the inventories are recorded in a “risk free” price if you don’t add any overheads, payroll, depreciation or additional materials used in the production to the unit price and let it just be in its base material expense. 

I have a feeling this opinion comes from the requirement that inventories should be measured at the lower of their cost or net realisable value. Whilst that’s absolutely true, it doesn’t mean that you should assume a potential and a very unlikely risk with the value of the inventory. Essentially what this “risk free” means is that first off the entity assumes that’s the lowest market price they would get from the good is the price of the base material used and secondly they assume to take all other expenses as their loss and in fact they are sure this will happen with the particular items currently in stock.

What’s wrong with this picture?

I will start from the second issue. The fact that the goods need to be recognized at the lower of doesn’t mean that one should assume the market value is lowest. If it’s not, it’s not to be used. It’s not “risk free” if you think you may be selling them at the material cost when in fact you know it’s very unlikely to happen and nothing in your prior experience has shown or indicated you might sell the goods with a loss.

Another point I wanted to make relates to the definition of “risk free” and it being the material cost. Why would someone assume that you’re able to sell the item at its material cost? Why not even lower?

I would like to emphasize that inventories are measured at the lower of their cost or net realisable value. Cost is a purchase price and / or costs made to produce the item. Net realisable value is what you’d be able to get for the item less costs necessary to make the sale. And that’s it. There’s no “risk free” price by definition. Or, well, yes, but that would be 0, because that’s really risk free.