Inventory Valuation 2026: Mandatory Precautions for the 31st March Year-End
The Ultimate Guide to Inventory Valuation: Precautions for Year-End 31st March 2026 Key Precautions for Year-End Inventory Valuation (FY 2025–26) For the financial year ending 31st March 2026, accurate inventory valuation is critical to ensure financial statements reflect true profitability. Proper measurement prevents mismatched expenses and revenues, which could otherwise lead to poor business decisions. Key Precautions for Year-End 2026 1. Implement a Freeze Period Stop all stock movement such as receiving, shipping, and production during the physical stock count. This helps avoid double-counting or missing items. 2. Adhere to AS-2 Guidelines Ensure inventory is valued at the lower of cost or net realisable value (NRV) on an item-by-item basis as per accounting standards. 3. Establish Strict Cutoff Procedures Verify shipments dispatched before year-end are recorded under Cost of Goods Sold (COGS). Confirm goods received before the cutoff date are in...
