Inventory count
An inventory count establishes the quantities physically held at a specified time. The records must then be checked for ownership, condition and appropriate cut-off so that only the entity’s inventory at the reporting date is included. Count results are valued using the applicable cost formula and net realisable value assessment. Counting and valuing are separate steps.
Worked example
Records show 100 units, but a checked count finds 96. At $5 cost per unit and with no net-realisable-value issue, actual inventory is $480 rather than $500. Investigate the four-unit shortage and adjust the records as appropriate.
Common mistake
Goods physically present may belong to someone else, and inventory owned by the business may be elsewhere. A count does not by itself establish ownership or monetary value.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | F1 | Supporting | July 2027–August 2028 |
| ACCA | F2 | Supporting | July 2027–August 2028 |
| ACCA | F3 | Direct | July 2027–August 2028 |
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | K1 | Supporting | July 2027–August 2028 |
| CIMA | BA3 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |
Related terms
Also called: stocktake, physical inventory count