Inventory valuation

An inventory valuation allows a company to provide a monetary value for items that make up their inventory. Inventories are usually the largest current asset of a business, and proper measurement of them is necessary to assure accurate financial statements. If inventory is not properly measured, expenses and revenues cannot be properly matched and a company could make poor business decisions.

An inventory and valuation of assets may also be used for other purposes. For example, in the attachment of a debtor's property or in compulsory transfer. An inventory and valuation of assets is an official court document that lists all assets included in the deceased's estate and their fair market value as of the date of death. Inheritance may be effected under a will or in accordance with intestacy law if the deceased left no will.