Stock valuation

[Riddm]

Hi All,



We sell a product, which is returned to us due to statutory warranty. We provide a credit for the full selling price and take these devices back.

How should we value this stock?

If we decide to destroy these devices for spare parts- how do we value these?


Thanks

 

[Clare@ClarityTaxation]

If you keep it in stock then value it at net realisable value, if that's less than the original cost.

The same would go for any stock that was destroyed, just replace the value with the value you expect to receive when sold.

 

[billmccallum1957]

https://en.wikipedia.org/wiki/Shrinkage_(accounting)