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Methods of stock valuation

Methods of stock valuation. There are three methods used for valuation of stock: FIFO: First in, first out LIFO: Last in, first out AVCO: Average cost. Net realisable value. Net realisable value can be defined as: Saleable value (i.e. what it can be sold for)

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Methods of stock valuation

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  1. Methods of stock valuation There are three methods used for valuation of stock: FIFO: First in, first out LIFO: Last in, first out AVCO: Average cost.

  2. Net realisable value Net realisable value can be defined as: Saleable value (i.e. what it can be sold for) Less Expenses needed before completion of sales (e.g., repair costs) Equals Net realisable value.

  3. Factors affecting the inventoryvaluation decision Ignorance Convenience Custom Taxation Capacity to borrow money or sell the business at the highest possible price Remuneration purposes Lack of information Advice of auditors

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