inventory responses

inventory responses

nathan keepers

2/10/2004

Hello,

Here are the responses I received to my inquiry on how different offices
determine the value of their inventory. Thank you for the replies. First
my question, then responses.

Nathan Keepers, CPO

My accountant wants an inventory of supplies on hand with values of the
lower of current new price or wholesale (if I had to sell it now). Do you
have a value that you apply to get supplies worth?

50 cents on the dollar? Other? By category?

I will post replies.

Nathan, inventory is counted at the price you paid to the supplier for the
item. A prosthesis or orthosis that has not been delivered or is in a
partial state of completion is counted as a % of the completed value. I
hope this is helpful


What are you deeming supplies? Resins, foams, PVA, stockinette, or orthotic
/ prosthetic componentry? A gallon of unused whatever thats three years old
and has been opened once is probabaly worth 50%, wheras three gallons of
something else that you buy three times a year is full value. Same for any
goods for resale. The dozen gizmos that a rep sold you with the promise
that your docs will Rx is 50% while the Aircast Walkers that you dispense
every day is 100%. What would the stuff be worth to you if you were to buy
it from someone. I'm surprised your accountant is'nt giving you guidelines.
I would'nt sweat this. Its a balance sheet figure and unless you have so
much that you can't turn around in your facility, should'nt color the true
current value of your company. Besides, it will change next year after you
finally use it, sell it off to your competitor, or throw it away.


Hi Nathan - we always use current prices... but then we do JIT
(just-in-time) ordering - we don't have alot of spare space for storage so I
think this is accurate for our situation.
Good luck,

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