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.

If the inventory value appears too low

The inventory value is calculated based on the cost prices you’ve entered for your products and variants. If the cost price is missing for some of your items, they’re counted 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. Then the inventory value will reflect the correct picture, both for your own overview and when it’s time to close the books.