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The body of accounting that deals with valuing and accounting for changes in inventoried assets. Changes in value can occur for a number of reasons including depreciation, deterioration, obsolescence, change in customer taste, increased demand, decreased market supply and so on.
It is a requirement of GAAP that inventory be properly accounted for according to a very particular set of standards, so as to limit the potential of overstating profit by understating inventory value, and to limit the potential to overstate a company's value by overstating the value of inventory which has in fact materially depreciated in value.
We follow the following process for Inventory Accounting
- You provide us with a listing of all product numbers in inventory and a count of the number of each product
- You provide reports of inventory sold and inventory purchased (exact method determined by your individual needs and systems).
- Annual physical inventory shall be taken by you.
- We reconcile physical inventories to accounting system inventory and prepare any adjustments necessary.
- We further provide the information in the format instructed by you. We may also complete the necessary statutory forms to help you file required returns on time.
- We also prepare reports and analysis to assist our clients in making the most of their financial information and records.
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