Inventory Valuation

What is Inventory Valuation?

Inventory Valuation is the process of assigning of monetary value on inventory whether of raw materials, work in progress or finished nature through a physical counting activity referred to as stock taking.

Where does Inventory Valuation apply?

Inventory Valuation applies where International Accounting Standards (IAS no-2) advocates valuation of inventory.

Why is Inventory Valuation necessary?

Inventory Valuation is necessary for this element of accounting determines on the computation of net profit of the organization at the end of the financial period.

How does Inventory Valuation work?

Information on Inventory Valuation is used in the direct computation of net profit/loss of the business whereby purchases is summed up to the opening inventory and closing inventory is subtracted to determine the net profit or (loss)

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