Marg ERP Inventory Valuation Worksheet
Closing stock value flows straight into profit, so wholesalers, pharmacies and distributors on Marg ERP often want an independent check before finalising accounts. This worksheet recomputes weighted average cost and applies the lower of cost and net realisable value to show write-downs.
| Item | Batch or code | Opening qty | Opening rate | Purchase qty | Purchase rate | Sold qty | NRV per unit | Closing qty | Weighted avg rate | Value at cost | Value at lower of cost and NRV | Write-down | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
300 | Rs 12 | Rs 3,612 | Rs 3,612 | Rs 0 | |||||||||
160 | Rs 15 | Rs 2,400 | Rs 2,000 | Rs 400 | |||||||||
60 | Rs 213 | Rs 12,788 | Rs 12,788 | Rs 0 | |||||||||
45 | Rs 138 | Rs 6,201 | Rs 6,201 | Rs 0 | |||||||||
220 | Rs 77 | Rs 16,830 | Rs 15,400 | Rs 1,430 |
Enter figures from your stock reports, for example opening, purchase and sales quantities for each item or batch. Weighted average here uses opening stock plus purchases for the period and ignores returns and mid-period price effects, so it may differ slightly from the method set in your software. Confirm the valuation method in your accounting policy. This worksheet is a cross check and not accounting or audit advice.
Stock valuation review
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How to use the worksheet
Pull opening quantity and rate, purchase quantity and rate, and sales quantity for each item or batch from your Marg reports. Add the net realisable value per unit, which is the expected selling price less costs to sell. The sheet calculates closing quantity, weighted average rate, value at cost, value at lower of cost and NRV, and the write-down. Compare the totals with the closing stock in your trial balance.
The method behind it
Inventory is generally carried at the lower of cost and net realisable value under both the older accounting standard and Ind AS 2. Cost under weighted average is the total cost of opening stock plus purchases divided by total quantity. Where NRV is below cost, the item is written down to NRV. Items with NRV above cost stay at cost and gains are not recognised.
- Weighted average rate = (opening value + purchase value) / (opening qty + purchase qty)
- Value at cost = closing qty x weighted average rate
- Lower of cost and NRV = closing qty x the smaller of the two rates
- Write-down = closing qty x the shortfall of NRV below cost
Reading the result
The example shows most lines carried at cost because NRV is above cost, while ORS and hand sanitiser are written down because the selling price is below their cost. A write-down percentage that is high suggests slow moving or mispriced stock, or expiry risk. Check batches near expiry separately, since their NRV may be close to zero, and compare with your provision policy.
Common mistakes
Common errors include mixing MRP with NRV, forgetting that GST is not part of inventory cost when input credit is claimed, valuing the whole item when batches have different costs, and ignoring sales returns and purchase returns. Another is comparing totals without checking negative stock items, which distort the weighted average. Clean negative quantities first.
Frequently Asked Questions
How is closing stock valued in Marg ERP?
Marg lets you choose how stock is valued, for example by purchase rate or average method, depending on configuration. Check your version's settings and your accounting policy, and use this sheet as an independent cross check.
What is the lower of cost and net realisable value?
It is the accounting rule that stock is carried at the smaller of what it cost and what you expect to net from selling it. It prevents overstating assets when prices fall or goods are damaged.
Should I include GST in stock value?
Generally not when you can claim input tax credit, since GST paid is recoverable and is not part of cost. If credit is blocked or you are unregistered, the tax may become part of cost. Check with your accountant.
Can I use FIFO instead of weighted average?
Both are accepted cost formulas, but you must apply one consistently for similar items. This sheet uses weighted average. For FIFO you need batch level purchase layers, which are better taken from your stock ageing report.
If you keep rebuilding valuation checks outside your billing software, Netray can help set up private reporting over your stock data, with the query visible and read-only access.
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