Can damaged inventory continue to be recognized as an asset?

1) The basis for determining the taxable cost of inventory;

2) The description and write-off information of the scrapping, damage, deterioration and residual value of the inventory within the enterprise;

3) Where compensation is involved for the person responsible, there shall be an explanation of the circumstances of the compensation;

4) The amount of the loss is relatively large (refers to accounting for more than 10% of the taxable cost of the enterprise's assets, or reducing the taxable income of the current year or increasing the loss by more than 10%, the same below), there should be a professional and technical appraisal opinion or a special report issued by a legally qualified intermediary agency.

Article 28.

The balance of the loss of inventory theft after deducting the insurance claim and the compensation of the responsible person from the taxable cost shall be confirmed on the basis of the following evidentiary materials:

1) The basis for determining the taxable cost of inventory;

2) A record of a report to the public security organs;

3) Where compensation is involved between the responsible person and the insurance company, there shall be an explanation of the compensation situation, etc. ”

During the year-end audit, the audit will find inconsistencies between the accounts and the facts when monitoring the inventory. This will allow your company to reconcile the accounts and include the damaged inventory in the accounts such as administrative expenses or non-operating expenses according to accounting standards.

If the audit doesn't find anything or your company is not required to audit the accounting statements, it's best to ask your manager. Whether it is hoped that the assets will be inflated, the profits will be inflated, and the enterprise income tax will be paid more, or the damaged inventory will be correctly adjusted and the income tax will be paid correctly, but the profits will decline - it mainly depends on the intention of the leadership. If it is inconvenient to ask the leader, you can figure out the leader's intentions by yourself.

The asset loss of inventory can be reversed, and at present, it can be converted into bad debt provision and inventory impairment provision, and other impairment provisions cannot be reversed once they are accrued.

When accruing inventory impairment losses, the accounting treatment is: borrow: asset impairment loss, credit: inventory decline provision.

When the reversal of the accounting treatment is, borrow: inventory decline provision, credit: asset impairment loss Sun San.

Pending property loss and overflow.

Damage disposal. The inventory loss or damage shall be accounted for as the loss or excess of the property to be disposed of. After being approved according to the management authority, the following situations will be dealt with according to the reasons for the loss or damage of the inventory

1. If the inventory shortage is caused by errors in measurement and receipt and mismanagement, the value of residual materials, recoverable insurance compensation and compensation for the negligent person should be deducted first, and the net loss should be included in the management expenses.

2. If the inventory is damaged due to natural disasters and other extraordinary reasons, the disposal income (such as the value of residual materials), recoverable insurance compensation and compensation for the negligent person shall be deducted first, and the net loss shall be included in the non-operating expenses.

If the inventory is lost or damaged due to abnormal reasons, the input VAT that cannot be deducted according to the regulations shall be transferred out.

Accounting entries

1. Inventory surplus.

According to the amount of distress listed in the "Inventory Inventory Report", the accounting entries of the enterprise shall be prepared as follows:

Borrow: raw materials.

Packaging. Low-value consumables.

Inventory items, etc.

Credit: Loss and Excess of Property to be Handled Loss and Excess of Current Assets to be Treated.

The inventory of the inventory is usually caused by the error in the measurement or calculation of the daily receipt and dispatch of the enterprise, and the inventory of the inventory can be offset against the management expenses, and the accounting entries are as follows:

Borrow: Loss and Excess of Property to be Handled Loss and Excess of Current Assets to be Treated.

Credit: Administrative expenses.

2. Inventory loss.

For the inventory loss, the enterprise prepares the following accounting entries according to the "inventory inventory report".

Borrow: Loss and Excess of Property to be Handled Loss and Excess of Current Assets to be Treated.

Credit: raw materials.

Packaging. Low-value consumables.

Inventory items, etc.

The value-added tax payable for the inventory loss caused by abnormal losses (theft, loss, mildew and deterioration caused by mismanagement) of purchased goods and products in progress shall be transferred to the account of "property loss and excess to be disposed of".

Borrow: Loss and Excess of Property to be Handled Loss and Excess of Current Assets to be Treated.

Credit: Tax Payable VAT Payable (Input Tax Transferred Out).

For abnormal losses caused by non-human factors, the input VAT that should be borne by the inventory loss inventory does not need to be transferred out.

Inventory damage caused by extraordinary losses is included in non-operating expenses.

1. As mentioned in the title, it should be combined with different circumstances.

2. In practice, if the extraordinary loss of the inventory is caused by natural disasters, then it can be included in the non-operating expenditure account, and if it is determined that the responsibility should be pursued and the relevant responsible person is recourse to compensation, then it should be included in other receivable accounts.

3. If the inventory has been insured (property insurance) and approved by the insurance company to be claimable, then it should be included in other receivables accounts.

If the inventory of the enterprise is damaged, it should be accounted for as the loss and excess of the property of the company. After being approved according to the management authority, it will be dealt with according to the cause of damage to the inventory of the enterprise.

If the inventory is damaged due to extraordinary reasons such as natural disasters, the disposal income (such as the value of the residual material), recoverable insurance or compensation and compensation for the negligent party shall be deducted first, and the net loss shall be included in the non-operating expenses.

If the inventory shortage is caused by errors in measurement and receipt and mismanagement, the value of the residual material, the recoverable insurance compensation and the compensation of the negligent person should be deducted first, and the net loss should be included in the management expenses.

If the inventory is lost or damaged due to abnormal reasons, the input VAT that cannot be deducted according to the regulations shall be transferred out.

Summary. The provision for inventory decline should be included in the asset impairment loss.

The provision for inventory decline should be included in the asset impairment loss.

The impact of the provision for inventory decline on the profit or loss for the current period.

Due to the persistence of the inventory market, raw materials, work-in-progress, and finished products may be impaired. The impairment of inventory is called the provision for decline in value of inventory in accounting, and the provision for decline in value will reduce the account value of inventory assets and reduce profits. At the balance sheet date, inventories are measured at net realizable value when the net value of the variable fission is lower than the cost of inventory.

At the same time, the provision for inventory decline shall be made according to the difference between the net realizable value and the cost, which shall be included in the profit or loss for the current period.