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It will vary depending on the product, but if inventory depreciation (ID) or inventory obsolescence (IO) actually occurs, the inventory has little value (except in cases where returns are possible). Only the theoretical or ledger value remains.

Sometimes, 'loss' is recorded under 'IO' or 'ID' in practice.

The definitions of 'inventory depreciation' and 'inventory obsolescence' need to be redefined for each product or company, and then the assess methods and criteria will also change.

Ultimately, the value of inventory is binary—either '0' or '1.'

Therefore, an effective inventory management is so important.

I think it would be good to write a thesis from this perspective.

In practical terms, there are two parts to this question. The first may be simply numerical, and it depends on what you know about the current price, market trend, and technology developments. The second is how to best move the inventory to reduce the risk. That may depend in turn on other factors in the business, such as when is the best time to declare a depreciation or loss.

The reference offered by Augustine Anane is interesting but only deals with AUDITING existing inventory plans in companies. It does not offer any guidance for developing the evaluation process itself.

In terms of both future audits and process integrity whatever mechanisms and measurements used to arrive at the assessment must be clear and consistent with adequate records and supporting data.

The methods you mentioned are just standard accounting procedures for general inventory control based on initial values. They do not address issues of obsolescence or depreciation in most cases. Depreciation may be included but is often calculated separately and only combined or reconciled when the inventory is actually removed.

hallo

my I help you with my little experience, I think that first action you have to do is auditing your warehouse. you can follow maybe it will suitable for you :

1. Collecting the sku data

2. audit the frequent of usage

3. using ABC analysis, and categorize it

4. if asses the value with 3 criteria

A, Fast Moving ,

B, Regular

C, Non Fast moving

Thank you

Sincerely

Faishal