Inventory count
The inventory is the physical count of stock and fixed assets at a reference date, by quantity and value; it is the basis for valuing the merchandise stock on the balance sheet.
Definition
Valuation is at acquisition or production cost, but at most at the lower market value. Whoever does not write down for years carries stock that no longer exists at that value — the most frequent silent error in trading businesses.
For tax purposes a flat reserve of one third of the stock value is permitted, the so-called inventory third. It is a deliberate imprecision in the interest of simplification, not a valuation rule of commercial law.
The numbers
- one third
- flat reserve permitted for tax purposes on merchandise stock FTA practice
Where to read it
What the software must be able to do
Check whether the software runs a stocktake with count sheets, differences and valuation, and whether it shows the inventory third separately. A stock figure without a stocktake function is a rolled-forward number, not a count.
Checked Aug 2026
More terms under Bookkeeping and retention: Accrual principle Accrued liabilities Annual accounts Association accounting Balance sheet Balance sheet total Book value Break-even point Business assets Business expenses Cash book Cash flow statement Cash receipts Contribution margin Cost centre Current assets Debit and credit Depreciation Double-entry bookkeeping Duty to keep accounts EBIT EBITDA Equity Equity ratio Financial year Fixed assets Fixed costs Foreign currency General ledger Gross profit Hidden reserves Income statement Journal Journal entry Liabilities Liquidity Loss carry-forward Membership dues Net profit Opening balance sheet Overheads Pass-through item Prepaid expenses Provision Record-keeping ordinance Reserves Retained profit Simple accounts Swiss SME chart of accounts Tamper resistance Turnover Value adjustment Variable costs Volunteer-run structure Voucher Year-end closing modules