Inventory Valuation Policy

This policy outlines a set of procedures to ensure that inventory will be properly controlled and costed and prevent losses or shortages.

According to this sample, all inventory should be properly controlled and costed to ensure accuracy of records for materials, work in process and finished or partly finished new or used goods, spares, and only those supplies which have been acquired for sale or which will become a part of the merchandise intended for sale. This policy discusses the "lower of cost or market" valuation method and states that it should be applied to actual inventory quantities when determining the value of each item of inventory.