The glossary to understand and take action

Inventory

Goods tracked in the operating cycle, particularly for sale, processing or consumption in production.

Notion comptable, fiscale ou juridique · Luxembourg Fiduciaries Editorial Team · Reviewed on

Understand the scope

Definition and points to distinguish

The file must explain the quantities, ownership and valuation. Physical existence and cost are not verified using the same documents. Damage, obsolescence or difficulties in selling may require a value analysis according to the company’s accounting framework.

In your file

What this changes in practice

Inventory comprises goods held in the course of business according to their intended use and the applicable accounting framework. Their valuation is not limited to counting: cost, condition and sales prospects must be reviewed. Goods held physically may belong to a third party. Reliable tracking links purchases, movements and sales to explain changes in quantities and margin.

A scenario to help you understand

Educational example

A company compares the counted inventory with its IT tracking system, then reviews unsold or damaged items before determining their value.

Fictitious situation, presented to illustrate the concept.

Prepare for what comes next

Points to check

  • Vérifier la propriété des biens
  • Justifier les quantités et coûts
  • Examiner les pertes de valeur

The practical question

Find out more

Pourquoi distinguer la quantité en stock de sa valeur comptable ?

Le comptage établit une quantité, mais la valorisation demande de déterminer le coût et d’examiner l’état et les perspectives de réalisation. Des articles invendables peuvent être présents physiquement tout en ayant perdu de la valeur. Les méthodes doivent être appliquées de manière cohérente et les ajustements documentés, afin d’expliquer leur effet sur le résultat.

Connecting concepts

Terms to know as well

Continue with the concepts, contacts and procedures related to this topic.

Physical inventoryAn operation to verify and count assets on a given date, with identified references, units and persons responsible.ImpairmentA value adjustment considered when an asset has suffered a loss in value that must be taken into account under the applicable rules.Contribution marginDifference between sales and costs that vary with the level of activity, under the management model used.AssetsThe assets side of the balance sheet includes resources controlled by the company: fixed assets, inventories, receivables, cash and other items recognised under accounting rules.Working capital requirement (WCR)The working capital requirement (WCR) measures the financing absorbed by the operating cycle, notably inventory and receivables, less operating liabilities.Luxembourg Veterinary and Food Administration (ALVA)ALVA brings together food chain control, animal health and animal welfare competencies. It is an important contact for businesses producing, processing or marketing foodstuffs.

Put it into practice

Explore further with our guides

Practical guideInventory of stocks: count, reconcile and value

Sources and verification

References consulted on 20 September 2026. Official procedures specify the applicable conditions and exceptions.

This guide explains a general process. The applicable rules depend on your situation; it does not constitute personalised advice. Report a correction.

A definition gives you a reference point. To examine your situation, clarify your question with a professional.