Stock-taking

Stock-taking - These are activities which leads to determine the real state of fixed assets and current assets of the firm and also liabilities in that moment. The purpose of the stock-taking is to check and correct all accounting data as well as to settle the people who were responsible financially for the overseeing property.

Aim of stock-taking

• gives assurance of the reality of the economic information by bringing consistency of data resulting from the records into conformity with the facts on a specific date,
• allows for settlement of assets and people responsible for overseeing the property,
• gives possibility to assess the assets in terms of their economic usefulness.

Stock-taking stages

The activities of stock-taking can be divided into four essential stages:

• First stage - preparing stock-taking,
• Second stage - making census of assets,
• Third stage - includes establishment, verification and settlement of differences in stock-taking,
• Fourth stage - using the results of the stock-taking to improve methods of assets management.

Some types of stock-taking

• systematic - it is repeated periodically or constantly in a continuous system,
• occasional - appears suddenly and is done for a reason (e.g. flood), but also for a special control,
• emergency - unannounced,
• full - includes both foreign and own assets,
• partial - includes only some of the assets,
• settlement - settled people who are financially responsible for the overseeing property,
• control - is done for purely inspection and is commissioned by bodies representing the company,
• review - is used to do a list to review the stock-taking for a particular purpose,
• annual - is used to determine the taxable income or to make balance and financial result realistic,
• quarterly - is used in some units to determine taxable income.

Stock-taking — recommended articles

Inventory analysis — Accounting process — International accounting standards — Periodicity concept — Accounting concepts — Accounting Convention — Time period concept — Tax books — Accounting Principles

References

• Alexander, D., & Nobes, C. (2004). Financial accounting: an international introduction. Pearson Education.
• Camfferman, K., & Zeff, S. A. (2007). Financial Reporting and Global Capital Markets: A History of the International Accounting Standards Committee, 1973-2000: A History of the International Accounting Standards Committee, 1973-2000. OUP Oxford.
• Peta, E. (2013). Evaluation Of Inventories According To The Standards Of Accounting. European Scientific Journal, 9(1).

Author: Dorota Dziedzina