Although for most legal entities, inventory is only a legal obligation, and not a pleasant part of business activities, the importance of inventory should still be emphasized.

The main task of inventory is to present the true and actual state of assets, liabilities and capital of the company, and allows for timely detection of omissions or fraud during business operations. The importance of conducting inventory is reflected in the reconciliation of the accounting balance with the actual state of assets and liabilities.

A legal entity is obliged to conduct an inventory of assets and liabilities at the beginning of business operations, as well as at least once a year with the balance on the day the business year or some other accounting period ends, in order to determine their actual state, and to reconcile the actual state with the accounting balance in the business books.

In order for a legal entity to conduct an inventory as soon as possible and without difficulty, good organization is required. The inventory procedure is carried out through six basic phases:

Preparatory actions include the procedure for appointing a census commission, preparing census sites, preparing the property that will be the subject of the census, and drawing up a plan and instructions for conducting the census;

Carrying out the census implies determining, measuring, counting assets and liabilities and recording the actual situation in the census lists;

Comparison of accounting and actual balance and determination of inventory differences (surpluses and deficits);

Compilation of the report on the completed census;

Making a decision on handling identified inventory differences;

Accounting records that include appropriate accounting entries.

Who is liable for the annual census? What precedes enumeration? What is listed? Tax treatment of established inventory differences?

For more information and help on the mentioned topic, contact us at info@respect.ba