The inventory committee determines the physical inventory values by applying the prudence principle meaning that the allowances, depreciation, or impairment will adjust these values. If the inventory value is higher than the asset value recognized in the accounting books, the inventory committee will highlight these assets at that value already recognized in accounting. Otherwise, the assets will be highlighted in the inventory lists at the inventory value.
⮚ Identifying the depreciation/impairment adjustment
The inventory commission proposes to provide for impairment of the depreciated or impaired assets identified during the inventory process or book the extra amount of depreciation, supported by the explanations related to the factors, which caused the depreciation and impairment.
⮚ Identifying the surpluses on the inventory management
- If during the stock count, the inventory committee identifies surpluses on inventory management, the respective goods are valued and recognized in the accounting books at their purchase cost, also considering the market price at the date of identifying the surplus or the purchase cost of the similar goods.
- The surpluses of the tangible and intangible assets identified during the inventory are recognized in the company’s books as investment subsidies.
⮚ Identifying the minuses of inventory management
- The missing goods identified during the inventory are valued and recognized in the accounting books at their accounting value.
- If the missing or damaged items from the inventory can be recharged to the guilty persons, the company’s administrator has to recharge the missing goods at their replacement value.
⮚ Compensations between the identified pluses and minuses of inventory management
When determining the value of the deficiencies, assuming that the inventory management deficiencies are not considered fraud, the possibility of compensating them with the identified surpluses is considered, if the following conditions are met:
- there is a risk of confusion between the sorts of the same material, due to the similarity in terms of their aspect: color, design, model, dimensions, packaging, or other elements.
- the identified plus or minus differences refer to the same inventory management period and the same management.
Compensation is not allowed if it is proved that the identified shortage in the inventory is the result of the theft or goods degradation, or due to the responsible persons’ fault in charge of the inventory management, respectively.
Impact on the profit tax
Expenses related to missing from inventory management or obsolete stocks or depreciable fixed assets, non-attributable, are not deductible, except in the following situations:
⮚ depreciable fixed assets/assets destroyed because of natural calamities or other causes of force majeure, under the statutory ruled conditions.
⮚ the depreciable fixed assets/assets non-ensured.
⮚ the impaired depreciable assets/fixed assets degraded in quality if proof of impairment is provided. This condition is considered fulfilled both, either when the destruction is carried out by own means, or if the stocks or depreciable fixed assets are handed over to specialized units.
Adjustment of VAT deduction right
The missing goods from the inventory management are not recognized as goods delivery.
⮚ If the missing assets are imputable, the imputed amounts do not represent the counter value of the operations within the VAT scope, regardless of whether these assets fall or not under the mandatory tax adjustment according to Art 304 Fiscal Code. The imputation is done at the replacement value.