Inventory value

Inventory value is the total value of all the items you have in stock. The value is calculated at cost, that is, what you paid for the items, not at the selling price. For example, if you have 100 items in stock, each of which cost you 50 kroner to purchase, your inventory value is 5,000 kroner, regardless of what you sell them for in the store.

Inventory Value in the Financial Statements

Your inventory is an asset you own, and therefore the inventory value is listed as an asset on the balance sheet in your financial statements, under the “Inventory” line item. It is included in your annual financial statements and is something your accountant reviews. According to accounting rules, inventory must generally be valued using the so-called lower-of-cost-or-market principle. This means you must use the lower of two values: either the cost price or the net realizable value, which is the amount you can realistically sell the item for if its value has decreased.

Shoporama saves the inventory value every night, so you can look it up as of a specific date, such as December 31, under Statistics → Inventory Statistics on the Inventory Value Over Time tab. The history begins on the day the feature was activated, so earlier dates cannot be displayed. The figures are based on the inventory entries and cost prices you have recorded in Shoporama, so for the annual financial statements, you must reconcile them with a physical inventory count. They are calculated at cost, so you must account for any write-downs based on the lower-of-cost-or-market principle yourself.

If the inventory value appears too low

The inventory value is calculated based on the price of your goods received, and where that information is missing, based on the cost prices you’ve entered for your products and variants. If both pieces of information are missing for some of your items, they’re calculated as zero kroner, and then the total inventory value will appear lower than it actually is. It’s easy to fix: go through your products and enter the cost price where it’s missing. Starting with the calculation for the next night, the inventory value will then reflect the correct figure, both for your own overview and when it’s time to close the books. The correction applies moving forward: the days that Shoporama has already saved will not be changed.