Precision in Stock: Inventory Valuation & Verification
Incorrect inventory valuation leads to distorted profits and regulatory red flags. At Diwakar and Associates, we bring technical cost-accounting expertise to the warehouse floor. Inventory valuation is the monetary assessment of unsold stock. It is done to ensure financial statements are accurate, to satisfy banking requirements for CC limits, and to prevent "profit leakage" through pilferage or obsolescence.
Legal Applicability & Limits
We ensure your business stays compliant with the following actual regulatory limits:
- Statutory Compliance: Under AS-2 and Ind AS-2, companies must value inventory at the Lower of Cost or Net Realizable Value.
- Income Tax Act: Under Section 44AB, businesses with turnover exceeding ₹1 Crore must provide verified valuation for Tax Audits.
- Cost Audit Rules: For companies maintaining Cost Records (Turnover > ₹35 Crore), accurate valuation of WIP and Raw Materials is mandatory.
- Banking Requirements: Essential for firms with Cash Credit (CC) limits to justify the drawing power against physical stock.
Where & When is it done?
Where
At manufacturing plants, project sites (Construction), and storage warehouses.
When
Conducted Monthly (for banks), Quarterly (for management), or Annually (for statutory closing).
How we provide this service at Diwakar and Associates
We follow a robust "Floor-to-Sheet" methodology:
1
Cut-off Testing
We verify sales and purchase entries at the date of the count to prevent double-counting.
2
Physical Verification
Our team conducts site visits for "Wall-to-Wall" counts of raw materials, metal scrap, or construction WIP.
3
NRV Assessment
We analyze age-wise stock reports to identify obsolete items that require a "write-down" as per accounting standards.
4
Reconciliation
We provide a detailed report mapping physical variances back to your ERP/Accounting records (SAP, Tally, etc.)
The Impact
Ensures accurate inventory valuation through physical verification, cost-accounting expertise, and strict compliance with AS-2, Ind AS-2, and tax audit requirements.
Our Commitment to You
Accuracy in Every Unit. At Diwakar and Associates, we commit to delivering meticulous inventory valuations that are 100% compliant with the latest MCA regulations and Cost Accounting Standards (CAS). You can expect timely filings, zero-compromise data security, and actionable insights that drive efficiency far beyond the balance sheet.
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