Valuation of inventory
This query is : Resolved
Pradeep Kr Shukla
(Querist)
23 September 2011
in a trading organisation where the company is operating all india basis and having the warehouses in every state. should the freight paid on stock transfer from one branch to another against form-F be included in the cost of inventory.
T.K. JAGANATHAN
(Expert)
24 September 2011
Freight if paid by the receiving warehouse then the freight has to be included in the valuation of stock at the receiving branch.
Pradeep Kr Shukla
(Querist)
24 September 2011
Sir the freight is being paid by the head office at delhi for all the transaction in india. Company is importing goods in delhi and selling it throughout india from different locations. Stock valuation is done at the year end for all india stock at fifo.
T.K. JAGANATHAN
(Expert)
25 September 2011
It is assumed that HO bills the stock to branches after considering the expenses and hence in such cases the inventory at Branch should be valued at the Stock Transfer Price. The margin if any inclued in pricing from HO to Branch should be nullified.
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