A lot of spare parts are purchased by our firm but consumption entries are not taken. Can physical stock verification process be used to identify closing stock at year-end?
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Quick Summary
This discussion explores using physical stock verification to determine closing stock for spare parts at year-end, especially when consumption entries are often missed. It's confirmed that this method is effective, provided no issues are made to production during the verification period. Guidance is also provided on classifying spare parts inventory versus expenses, with a reference to Accounting Standard (AS) 10 for capitalisation criteria.