Profit And Loss Statement Inventory Valuation

by Assistant Store Mgr

P&L Inventory Valuation

P&L Inventory Valuation

I am an Assistant Store Manager and need a better understanding of what is inventory invaluation?

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Jun 06, 2018
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by: Stephanie

Did you mean inventory valuation as opposed invaluation? If so, inventory valuation is a process that allows a company to provide a monetary value for items that make up their inventory.

Proper measurment of inventory is necessary to assure accurate financial statements. If inventory is not properly measured, expenses and revenues cannot be properly matched and a company could make poor business decisions.

When you perform an inventory valuation you typically do a physical count of all inventory on hand on a given date and determine what the dollar value of that inventory is.

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