Valuation of op stock
Querist : Anonymous
Mr.A has estimate the stock valuation.That amt is recorded in tally by entering in value.He maintained proper records of quntity in no. .This is in prictice last 5 years.
But now Mr.A wants to exact valuation of inventory in no. as well as stock.For this finacial year they start to record purchase update by entering in updated software with qty detail & value?
my query:-
how to bring opening stock valuation with qty & value?
how practically it implemented?
pl guidence in detail?
Querist : Anonymous
You will get the quantity of each stock item.
Ascertain the last purchase price of each and every item and you will arive at the value of stock.
If this value differs from the opening value, adjust the difference in some items.
Valuation depends on many factors.
1) Is the valuation done on FIFO, LIFO or weighted average basis.
2)Whether you consider overhead valuation.
3)How many different kind of stocks are present.
Answer these questions then only I will be able to guide you
Querist : Anonymous
2.yes
3.different kinds of what?
Querist : Anonymous
moderate moving
fast moving items of stock involved.
---
### Step 1: **Physical Stock Verification**
* Conduct a **one-time complete physical count** of all stock items as of the opening date of the new financial year.
* Count every item, noting the exact **quantity** for each SKU or item.
* This includes all stock categories: slow moving, moderate moving, and fast moving.
### Step 2: **Determine the Value of Each Item**
* Since you use **FIFO** (First In First Out), value each stock item at its **purchase cost of the oldest remaining batch**.
* Retrieve purchase records and match stock quantities to the corresponding purchase costs.
* Include overheads and direct expenses (freight inwards, handling charges) as part of the cost.
* For slow-moving or obsolete items, apply appropriate valuation (like lower of cost or net realizable value).
### Step 3: **Reconcile with Last Year's Closing Stock**
* Compare the physical stock quantity & value with the previous year's **closing stock records**.
* Adjust for any discrepancies caused by spoilage, theft, or accounting errors.
### Step 4: **Enter the Opening Stock in the New Software**
* Using the counted quantities and calculated values, input each item’s **quantity and value** as the opening stock in your new system.
* Ensure the **total value matches** your reconciled valuation.
### Step 5: **Continuous Recording Going Forward**
* From now on, record all purchases, sales, and stock movements in the software with **accurate quantity and value**.
* Use FIFO for costing during stock issue to keep consistency.
### Additional Points:
* For **slow-moving items**, verify if any provision for obsolete stock is needed.
* For **different categories** of stock, maintain proper item codes and groups in the software for easier tracking.
* If your software supports, generate reports like **stock ledger, stock valuation, and ageing reports** to monitor inventory health.
---
### Summary:
| Step | Action | Outcome |
| --------------------- | -------------------------------- | ----------------------------- |
| Physical Verification | Count all stock physically | Accurate quantity data |
| Valuation | Apply FIFO cost & overheads | Accurate stock value |
| Reconciliation | Match with previous records | Adjust discrepancies |
| Data Entry | Input opening stock qty & value | Updated inventory in software |
| Ongoing Recording | Record all transactions properly | Accurate inventory management |
---
If you want, I can also help you draft a simple **opening stock entry template** for your software or Tally. Would you like that?
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