This checklist ensures that the inventory is accurately valued and accounted for in financial statements, following the appropriate valuation methods to comply with accounting standards.
Compile a comprehensive list of all inventory items, including descriptions, quantities, and locations.
Choose the appropriate method for inventory valuation (e.g., FIFO, LIFO, or weighted average) based on company policy and accounting standards.
Conduct a physical count of all inventory items to verify quantities and conditions against the inventory list.
Update the inventory records to reflect any discrepancies found during the physical count.
Apply the chosen valuation method to the adjusted inventory quantities to determine the total inventory value.
Prepare and document the inventory valuation calculations for review and audit purposes.
Submit the inventory valuation report for management review and obtain necessary approvals before finalizing.
Ensure the finalized inventory valuation is accurately reflected in the financial statements and reported in compliance with relevant accounting standards.