How to understand the cost of inventory, the net realizable value of inventory, the book value of inventory?
The cost of inventory includes the cost of purchased inventory, the cost of self-processed inventory and the cost of inventory acquired by other means, and the cost of inventory at the balance sheet date (period) is the closing balance (book balance) of accounting accounts such as "inventory goods" or "raw materials";The net realizable value of inventories should be calculated according to the intention of holding the inventories;Book value of inventory = book balance of inventory (closing balance) - provision for decline in value of inventory.
Calculate the provision for inventory decline that should be accrued in the current period based on economic transactions.
There are two cases:
First, the goods directly to the outside world, at this time, it is necessary to pay attention to whether there is a situation where part of the contract has been signed and part of the contract has not been signed, if there is, it will be regarded as two batches of inventory. For inventories without impairment, there is no need to make provision for inventory declines, and for inventories with impairment, provisions for inventory declines are required, and it is important to remember that the calculation results of the part with a contract and the part without a contract cannot be combined
Second, raw materials for production. The first step is to calculate whether the product is impaired, if the product is not impaired, there is no need to make provision for the inventory decline of raw materials;In the second step, the net realizable value of raw materials is calculated according to the estimated selling price of the product, that is, the net realizable value of raw materials = the estimated selling price of the production product - the cost of further processing - the estimated sales tax of the product = the net realizable value of the product - the cost of further processing, so as to calculate the accrued provision for inventory decline.
If the influencing factor for the write-down of the value of the inventory has disappeared, the provision for the decline in the value of the inventory that was previously accrued due to that factor can be reversed.