When is an inventory count mandatory? The complete list in NAS No. 19
Year end, a change of storekeeper, theft or fire, cash every month, fuel every quarter: in which cases an inventory count is not optional, according to the list in the standard, with an example covering one year.
Normally the date of an inventory count is chosen by the head (NAS No. 19, paragraph 7). But the standard lists a number of situations in which the head's wishes are not asked: the inventory count is mandatory.
Mandatory cases under NAS No. 19
- Transactions with property: when property is leased out, bought or sold, and also when a state enterprise is transformed (privatised) in the cases provided for by law (paragraph 5)
- Before the annual report: before the annual financial statements are prepared. Property counted after 1 October of the reporting year is an exception (paragraph 5)
- Set frequency (paragraph 5): inventories at least once a year; fixed assets at least once every two years; library collections once every five years; cash, monetary documents, valuables and strict-accountability forms once a month; fuel and lubricants and food products every quarter; precious metals within the periods set by law
- Cases given in the standard under the heading "production inventories" (paragraph 5): when fixed assets and inventories are revalued; when persons with material responsibility change (on the day the work is handed over and accepted); when facts of theft or abuse, or of damage to valuables, are discovered; in natural disasters, fires, accidents or other emergencies caused by extreme conditions; when the organization is liquidated (reorganised), before the liquidation (separation) balance sheet is prepared; in other cases provided for by law
- Under collective material responsibility (paragraph 6): when the team leader changes; when more than fifty percent of the team's members leave it; when one or more team members request it
- All other inventory counts (planned or unannounced): their number and dates are set by the head (paragraph 7)
- NAS No. 4 also requires inventories to be counted at least once a year and names confirming net realisable value as one of the purposes (paragraph 90)
Example: one year at "Bek Savdo" LLC
| Event | Mandatory? | Why |
|---|---|---|
| Cash is counted at the end of every month | Yes | Cash once a month |
| March: storekeeper Sherzod left and Dilnoza took his place | Yes | The person with material responsibility changed; the count is held on the handover day |
| March, June, September, December: the fuel balance is checked | Yes | Fuel and lubricants every quarter |
| July: rain leaked through the warehouse roof and boxes got wet | Yes | A fact of damage to valuables was discovered |
| 15 October: a full count was held in the warehouse | Head's decision | This satisfied the at-least-once-a-year requirement |
| December: the warehouse before the annual report | Not required | Counted after 1 October, on 15 October |
| December: office equipment before the annual report | Yes | It was not counted during the year |
Test yourself
5 questions on this topic: pick an option or reveal the answer.
Under NAS No. 21, on the basis of which documents are transactions in account 5110 "Settlement account" recorded in the books?
Zomin Tuz LLC withheld an amount from an employee's wages in favour of another organisation under a court enforcement document. In which account under NAS No. 21 is this liability kept?
An inventory count was carried out in the warehouse of "Chirchiq mashinasozlik", and a surplus of domestic equipment requiring installation, not shown in the records, was found. What journal entry is made under NAS No. 21?
A stock-take in the warehouse of "Denov meva" LLC found part of the boxes of dried fruit missing. After the investigation no person at fault was identified. Under NAS No. 21, with which journal entry is the shortage recorded?
A stock-take was carried out in the warehouse of "Quva anor" LLC, and 40 boxes of pomegranate juice (the company's own product) not shown in the books were found in surplus. Under NAS No. 21, which journal entry is made?
Answered: 0 / 50 of 5 correct
All tests →See also
Sources
- NAS No. 19 "Organization and Conduct of Inventory Counts", paragraph 5 · cases of mandatory inventory counts, frequency (inventories, fixed assets, library collections, cash and strict-accountability forms, fuel and lubricants and food products, precious metals) and the additional cases under "production inventories"
- NAS No. 19, paragraphs 6 and 7 · cases under collective material responsibility; the number and dates of the remaining inventory counts are set by the head
- NAS No. 4 "Inventories", paragraph 90 · inventories are counted at least once a year: to establish their actual existence, to confirm net realisable value and to monitor their safekeeping
- Example · compiled by the author