The inventory (from Latin invenire “to find something” or “to come across something”, Latin inventarium “totality of what is found”; English stocktaking ) is the inventory of assets and debts on a specific date in accounting .
A prerequisite for proper bookkeeping and accounting is an inventory of the company's assets and debts at the beginning and end of the financial year . They prove that assets and debts actually exist. Evidence of physical assets is provided by counting , measuring or weighing them ; intangible assets such as receivables , debts or goodwill , licenses , patents and related rights (such as concessions , brands , utility models , designs , trademarks or recipes ) by means of book inventory ( balance lists ). For example, the number of items (number of cars in a vehicle fleet ) is counted, liters ( drinks ) or lengths ( elliptical goods ) are measured and weights ( meat ) are weighed . In the case of assets that may be subject to a decline in value - such as company buildings or seasonal product ranges - appropriate depreciation ( deduction for wear and tear ) must be made.
Principles of proper inventory
The principles of proper inventory are now a part of the principles of proper bookkeeping in Germany . The inventory principles include in particular:
- Completeness of the inventory ( balance sheet truth ),
- Correctness of the inventory ( (1) HGB),
- Continuity of the inventory ( HGB),
- Individual entry in the inventory and
- Clarity and verifiability of the inventory ( balance sheet clarity ).
In order to enforce these principles, company-internal organizational inventory guidelines are required as work instructions to prevent inventory errors. These guidelines include scheduling , personnel planning , room planning , process planning and documentation for the inventory to be carried out.
If a physical inventory is missing or if the inventory contains not only minor defects in formal or material terms, the bookkeeping is not to be regarded as proper (Section R 5.3, Paragraph 4 of the Income Tax Regulation ) and the accounting based on this is void .
According to commercial law , the inventory is an inventory that records the type and quantity of assets and debts in an inventory. Pursuant to (1) of the German Commercial Code (HGB), every merchant has to " precisely record his land , his claims and debts , the amount of his cash and other assets at the beginning of his trade and state the value of the individual assets and debts". The inventory is therefore a mere physical inventory, which is followed by an assessment . According to Section 240 (2) HGB, an inventory must be drawn up at the end of the financial year , which means the balance sheet date . As a rule, the balance sheet date is December 31 of each year, but a “different financial year” is also possible. The tax authorities can rule for inventory to a period of 10 days before and after the balance sheet date, with the occurring within that period, changes in inventories are properly accounted for.
The inventory procedures take into account the type of items to be inventoried.
The physical assets are recorded by counting, measuring or weighing. An estimate with subsequent evaluation is also permitted if an exact recording is economically unreasonable or impossible (e.g. coal stocks on a dump). (Comparison between actual stock and book value) resulting from the stock of inventory discrepancies , these are directly on the profit and loss account to conduct.
The book inventory determines the inventory of non-physical assets and debts (such as receivables , bank balances , liabilities ) that refer to the records of the financial accounting ( receipts , invoices , balance lists , account statements , receipts ).
In asset accounting , the asset inventory replaces the physical inventory of movable assets ( vehicle fleet , machines , factory and office equipment , but not low-value assets ). A system map with the following information must be kept for each item in the system directory:
- exact description of the item
- Balance sheet value on the balance sheet date
- Date of purchase or manufacture
- Amount of acquisition or production costs
- Useful life
- annual depreciation
- Day of departure
According to the frequency and time of the inventory, there is, in addition to the key date inventory, the random sample inventory , the permanent inventory and the postponed inventory . According toGerman Commercial Code (HGB), they are considered to be an inventory simplification procedure in which the inventory of the assets according to type, quantity and value can also be determined using recognized mathematical-statistical methods on the basis of random samples. The inventory sampling ( Paragraph 1 HGB), the permanent inventory (§ 241 Paragraph 2 HGB) and the preceding or postponed key date inventory (§ 241 Paragraph 3 HGB) are provided.
The inventory sampling is limited to the carrying out of carefully selected and representative samples , using random sampling procedures of statistical methodology. The total inventory is then extrapolated from the random samples. A sampling error of no more than 1% of the value of the population may not be exceeded. The informative value of a random sample inventory must correspond to the value of a complete inventory, and the inventory may only be drawn up with the aid of recognized mathematical-statistical methods (e.g. mean value estimation ). The inventory sampling is especially used in large companies . In Germany, Siemens AG was the first company to introduce random sampling at the beginning of the 1970s ; this method was then legally established in January 1977.
In contrast to the random sample inventory, the permanent inventory is a total recording and makes it possible to distribute the inventory in the financial year. The prerequisite for this is the keeping of a stock book and verifiable documents for all entries and exits. At least once in the fiscal year, a physical inventory must be carried out and the target stock in the warehouse accounting must be compared with the actual stock. In contrast to the key date inventory, not all stocks have to be recorded at the same time, i.e. the recording times and quantities can be freely selected. However, the inventory must not be limited to random samples or a representative cross-section. The result of the inventory is recorded in the stock ledger, stating the exact time of the recording, and the stock ledgers or stock cards are corrected accordingly.
There is a permanent inventory in the case of frequently changing stocks, for example with the cash on hand or inventory . During the current financial year, these are subject to sales-related inventory updates through additions ( cash payments , incoming goods ) and disposals ( cash payments , goods outgoing ), so that the actual inventory always matches the book value . According to § 241 Paragraph 2 HGB, permanent inventory is permitted under commercial law for all assets, but under certain tax conditions only for inventories. For this purpose, tax law requires continuous inventory accounting, in which the inventory of goods with incoming and outgoing goods is continuously recorded (Section R 5.3, Paragraph 2 EStR). It cannot be used for objects that are exposed to uncontrollable losses such as shrinkage , evaporation , spoilage or fragility or particularly valuable objects (Section R 5.3 Paragraph 3 EStR).
The preceding or postponed inventory can come into question if it is impossible to record on the key date (for example in the case of very large stocks) or if the requirements for a permanent inventory are missing.
The physical inventory takes place on any day within the last three months before or the first two months after the balance sheet date (Section 241 (3) No. 1 HGB). The inventory determined on the day of recording is only updated in terms of value (not in terms of quantity) to the reference date or calculated back; the inventory bears the date of the actual recording.
|Update of values||Back calculation|
|Value on the day of the inventory (e.g. Oct. 15)||Value on the day of the inventory (e.g. Feb. 28)|
|(+) Value of additions from October 15 to December 31||(-) Value of additions from Jan 1st to Feb 28th|
|(-) Value of disposals from October 15 to December 31.||(+) Value of disposals from Jan 1st to Feb 28th|
|(=) Value on the closing date (December 31)||(=) Value on the closing date (December 31)|
The inventory of physical objects through inventory forms the most important quantitative basis for accounting. The inventory aims to protect creditors and serves the self-control of the merchant. In addition, it fulfills a control function for bookkeeping because the stocks are recorded independently of it.
In Switzerland , according to Art. 958 Para. 1 OR, stocks must be physically taken up once a year. Art. 958c para. 2 OR requires companies that are obliged to submit accounts to provide evidence of the individual items in the balance sheet and in the notes by means of an inventory or, alternatively, in another way. Carrying out the inventory and drawing up the inventory follow the principle of proper accounting in accordance with Art. 662a OR, in particular according to the principles of completeness, clarity and caution.
In Austria , Section 191 (1) of the Austrian Commercial Code requires the assets and debts to be recorded, including for the end of the financial year (Section 191 (2) of the UGB). According to Section 192 (1) of the UGB, the assets are generally to be recorded in the form of a physical inventory; according to Section 192 (4) of the UGB, spot checks are also permitted.
The IFRS do not mention the inventory and assume it when accounting for inventories, they focus on their valuation. IAS 8.10 also provides for the adoption of pronouncements from other accounting standards in the event that a situation is not regulated by any IAS standard or interpretation . The inventory is also recognized in the IFRS through this opening clause .
- Kurt Krummeich: Material and warehouse management. A guide for practice and training and further education . 3rd revised edition. Verkehrs-Verlag Fischer, Düsseldorf 2006, ISBN 3-87841-249-5 .
- Norbert Horn / Rainer Walz, Commentary on the Commercial Code , Volume 3, Third Book, §§ 238-342a, 1999, § 240 Rn. 4th
- Norbert Horn / Rainer Walz, Commentary on the Commercial Code , Volume 3, Third Book, §§ 238-342a, 1999, § 240 Rn. 5
- Gerald Preißler / German Figlin, IFRS-Lexikon , 2009, p. 79
- Peter Ulmer / Uwe Hüffer, large commentary on HGB accounting law, 1st sub-volume, §§ 238-289, 2002, § 240 Rn. 6th
- Norbert Horn / Rainer Walz, Commentary on the Commercial Code , Volume 3, Third Book, §§ 238-342a, 1999, § 240 Rn. 8th
- Norbert Horn / Rainer Walz, Commentary on the Commercial Code , Volume 3, Third Book, §§ 238-342a, 1999, § 241 Rn. 3-7
- Harry Zingel, inventory, inventory, balance sheet. Basics of the commercial inventory and evaluation , 1999, p. 3
- Section R 5.3 paras. 2 and 4 EStR
- Peter Ulmer / Uwe Hüffer , large commentary on HGB accounting law , 1st sub-volume, §§ 238-289, 2002, § 240 Rn. 7th