Changes in Inventories


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Changes in Inventories is represented by the value of entries into inventories less the value of withdrawals from inventories and of recurrent losses of goods held in inventories.

The recurrent losses of goods held in inventories could be due to physical deterioration, accidental damage or theft. It may occur to all kinds of goods in inventories.


  • Company XYZ acquired $1.0 million in inventories and sold $0.5 million of inventories during the year. If there was $0.1 million worth of accidental damage cost, the changes in inventories would be $0.4 million i.e. (1.0 - 0.5 - 0.1) million
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