Inventory Costing & Inventory Devaluation
Optimizing Financial Accuracy Through Strategic Inventory Valuation
The Inventory Costing & Inventory Devaluation standard provides a framework for consistent and accurate inventory valuation across our portfolio companies. By implementing appropriate costing methods and devaluation practices, we enhance financial reporting accuracy, support informed decision-making, and optimize inventory management.
Who: President, Finance Leader
Frequency: Annually
The Inventory Costing & Inventory Devaluation standard is crucial for maintaining accurate financial reporting and effective inventory management across our diverse portfolio of companies. Key components include:
1. Costing Methods: Guidelines for selecting and implementing appropriate inventory costing methods (e.g., FIFO, LIFO, weighted average).
2. Consistency: Ensuring uniform application of costing methods across similar inventory types and profit centers.
3. Devaluation Criteria: Establishing clear criteria for identifying and valuing obsolete or slow-moving inventory.
4. Reporting Procedures: Outlining processes for accurate inventory reporting in financial statements.
5. Review Mechanisms: Regular assessments of inventory valuation accuracy and appropriateness of costing methods.
6. Documentation Requirements: Specifying necessary documentation to support inventory valuations and devaluation decisions.
For detailed information, refer to our Inventory Costing Standard and Inventory Devaluation Standard.
This standard supports financial accuracy, aids in decision-making regarding inventory management, and ensures compliance with accounting principles across our organization.
