I'm just putting the books together for my accountant for the year end accounts. She has asked for my closing stock value at the year end. Due to the nature of my business, it's virtually impossible to accurately calculate an exact figure but I believe the cost of the items would be approx £2K. However, there is no way I could sell these items individually as they are used in the construction of products.
How should I value these, as I want to keep my profits as low as possible?
Stock should be included in the accounts at lower of cost or net realisable value (NRV = the amount you would receive if you sold it on the open market).
Therefore, if you believe your stock would not reach it's cost price if you sold it individually, you need to calculate the NRV. As the stock is only £2K, it's probably not material to your accounts, and therefore you can probably estimate the stock value using appropriate assumptions. Your accountant should check your workings.
To be honest it really would be nigh on impossible to sell parts individullay or even as a group on the open market. Will def speak to accountant and let them sort (I pay them enough!). Cheers Guy,
