Inventories are acquired materials to use for their own needs, produced or processed by the finished products (goods and services) suitable for sale or in the course of production, semi-finished products and goods purchased for resale without further processing.

Impairment of inventory left is made in connection with the loss of, or in connection with the valuation of the net selling price rather than the purchase price/ purchase or production cost.

If stocks are slow-moving, the entity shall make allowance on the basis of what has happened in the past. For this purpose, the most convenient to use a simple formula, which links impairment loss with such factors as slow-moving and inventories written down.

Example calculation of inventory write-down slow-moving part of our free - training.

Impairment is recorded in the income statement as other operating expenses in correspondence with the account inventory write-downs.

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