Stock valuation

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The value of stock goes up and down not just with market trends but also for other reasons, stock may be obsolete or very slow moving and so not worth what was originally paid, or it may be very rare and in high demand and worth a lot more. Similarly there are stock movements, losses through pilferage and unrecorded usage.

In addition there are stock movements every month, purchases and sales. When setting up there is a useful wizard for opening stock which is accessed from the wizards option on the modules menu.

Periodically you will have stock check and find inconsistencies. These needs to be represented in the accounts. Accounting rules dictate that a conservative valuation be made, this is normally the cost price but where you have slow lines and obsolete stock these may be written down well below cost.

The stock module has several reports that will provide you with the stock valuation, however, you need to check that items are correctly valued especially obsolete and slow moving stock.

Once you have a figure, all you need to do is to reverse out the previous periods entry in closing stock (5201) and make the new entry for the current value, the other side of the jornals in both cases is the balance sheet stock account (1001)