Stock Valuation

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Kay Thompson
Kay Thompson Registered Posts: 22 New contributor 🐸
in General accounting discussion
Hi I have a client who imports a lot of his stock particulary from China.
When recording the stock in does he use the price it was purchased for or can he include the import and freight charges.

If he does not include the charges where should these be recorded.

Thanks

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  • Anne Boleyn
    Anne Boleyn Registered Posts: 196 Dedicated contributor 🦉
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    Imports

    Hi

    I would just record the stock at cost/net realisable value and put the carriage charges etc to carriage.

    Hope this helps
  • JodieR
    JodieR Registered Posts: 1,002 Beyond epic contributor 🧙‍♂️
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    Yes, I agree with Anne, I had a client who imported costume jewelery & they recorded the items at the cost on the invoice - the freight charges were extortionate compared to the value of the items, but it would get too complicated to apportion the shipping costs accross the stock.
  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
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    Anne Boleyn wrote: »
    Hi

    I would just record the stock at cost/net realisable value and put the carriage charges etc to carriage.

    Hope this helps

    Only downside to this is it could lead to misleading low closing stock figures?

    I'm assuming compared to buying from the UK the stock is very cheap but delivery costs high.

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