#inventory
Inventory tracking, valuation, and management for businesses
Estimate changes apply prospectively; principle changes restate history via retained earnings — and the IRS wants Form 3115 for the tax side.
Perpetual inventory updates stock and COGS with every sale; periodic backs COGS out of a physical count — pick by SKU count, volume, and margin.
ABC analysis ranks every SKU by annual consumption value, so A items earn weekly counts and lean stock while the C tail coasts on bulk autopilot.
GAAP allows LIFO and expenses R&D; IFRS bans LIFO and capitalizes development — four framework gaps that change reported profit, and records that survive both.
GAAP books assets at what you paid, not what they are worth — except securities, write-downs, and crypto, which follow fair value.
Underapplied overhead means actual spending beat applied overhead — close a small variance to COGS, prorate a material one across WIP, finished goods, and COGS.
FOB shipping point transfers ownership at the seller's dock; FOB destination, at the buyer's — and the term decides revenue timing, freight, and cutoff.
The gross method books purchases at full invoice price; the net method books them minus the discount and flags misses as Purchase Discounts Lost expense.
Product costs ride with inventory onto COGS at sale; period costs hit profit now — misclassifying either shifts profit between months.
Walmart fines 3% of COGS per case missing its 90% on-time and 95% in-full targets — dispute fast in HighRadius with PO, ASN, and delivery proof.
Retailers deduct 1–5% per violation for late shipments, bad labels, and missing ASNs — dispute fast with PO, ASN log, and proof of delivery.
COGS is the direct cost of what you sold — materials, labor, freight. Revenue minus COGS is gross profit, the verdict on whether your pricing works.
