The lower of cost and net realisable value (LCNRV) basis of valuing inventories is an example of:

Correct! conservatism

This approach reflects the concept of conservatism in accounting, which requires that potential losses be recognized when they are probable, while gains should only be recognized when realized or virtually certain. By valuing inventories at the lower of their cost or net realizable value, a company is recognizing the possibility of a loss due to obsolescence, damage, or other factors that might reduce the inventory's selling price below its cost.