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Inventory · Definition

Inventory Valuation

Assigning a monetary value to the stock you hold.

Inventory valuation converts physical quantities into a balance sheet figure using a costing method such as FIFO or weighted average, applied to landed cost rather than invoice price alone.

Because closing inventory feeds directly into COGS, the valuation method and its accuracy determine reported gross margin. It is one of the few places where a warehouse mistake becomes a financial misstatement.

See it in AWRA OpsHub

Inventory Insights

Related terms

Weighted Average Cost

WAC

Valuing stock at the blended average cost of all units held.

First In, First Out

FIFO

Issuing or costing the oldest stock first.

Landed Cost

The total cost of a product once it arrives, including freight, duties and fees.

Cost of Goods Sold

COGS

The direct cost of the products a business sold in a period.

More in Inventory

ABC Analysis Asset Tracking Available to Promise (ATP) Backorder Barcode Carrying Cost Consignment Inventory Cycle Count

Inventory Valuation is not just a definition here

Inventory runs on this vocabulary every day in AWRA OpsHub — 44 of our 259 glossary terms describe things the platform actually does.

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