Inventories (krājumi)
In Latvian: Krājumi
Inventories (krājumi) are current assets that an undertaking holds for sale or for use in production and services: raw materials and consumables, work in progress, finished goods and goods for resale.
They appear among current assets on the balance sheet, together with advance payments for inventories. Physical quantities are checked in a stocktake and differences are booked.
Cost is measured by the weighted average method or FIFO (first in, first out), with one method used for all inventories of a similar kind and use.
At the balance sheet date inventories are carried at the lower of cost and market price. Damaged or obsolete items are carried at net realisable value.
Example
SIA "Ozols" buys 100 boards at EUR 2.00 and later 100 more at EUR 2.40, then sells 150. Under FIFO the cost of the boards sold is EUR 320 (100 × 2.00 + 50 × 2.40) and EUR 120 remains in stock. Under weighted average (EUR 2.20) cost of sales is EUR 330 and EUR 110 remains.
Legal basis
- Law on Annual Statements and Consolidated Annual Statements, Section 25 likumi.lv
- Law on Annual Statements and Consolidated Annual Statements, Section 24 likumi.lv
- Latvian National Terminology Portal: krājumi termini.gov.lv
This explanation is for information and does not replace tax or legal advice. The law in its current consolidated text prevails.