Rescheduled Inventory Counts: Early and Late Inventory Counts Explained Simply

If the balance sheet date falls during a busy period, the Postponed inventory An elegant solution: The physical inventory is decoupled from the cutoff date and scheduled for a less busy period. This article explains early and late inventory counts, their legal basis, and their advantages and disadvantages.

Key Points at a Glance

• The delayed inventory allows for the recording of up to 3 months before or 2 months after the balance sheet date.
• The legal basis is § 241(3) of the German Commercial Code (HGB).
• The recorded inventory is valued as of the reporting date calculated forward or backward.
• Advantage: Even distribution of the workload. Prerequisite: a transparent value update process.

What Is a Delayed Inventory Count? – Definition

In the Inventory conducted at a different time The physical inventory count is conducted not on the balance sheet date, but on a different date within a legally defined time frame. The value determined is then adjusted to reflect the balance sheet date.

There are two types:

• Early Inventory Count: Enrollment up to three months before the deadline.
• Retrospective Inventory: Enrollment is accepted up to two months after the deadline.

Legal Basis and Valuation Adjustments

The postponed inventory is in § 241(3) of the German Commercial Code (HGB) regulated. The key factor is the Value-based carryforward or retroactive adjustment: From the date of entry to the balance sheet date, all additions and disposals are accounted for at their value so that the balance sheet date value can be correctly determined. Simply updating the quantities is not sufficient—updates based on value are required.

Advantages and Disadvantages of Periodic Inventory

Advantages

• Balancing the workload—the inventory can be scheduled for a quiet period.
• Less time pressure, resulting in higher counting quality.
• No need to maintain ongoing, permanent inventory records throughout the year.

Disadvantages

• Costs associated with value-based projection or retroactive calculation.
• Not permitted for particularly valuable or endangered populations.
• Sources of Errors in Value Updates.

Distinction from Other Types of Inventory Counts

Periodic inventory is a middle ground between rigid periodic inventory and continuous inventory. Our overview of inventory types shows which method is best for you.

Digitally Back Up Postponed Inventory Counts

The biggest source of error in manual inventory is value updating. A digital inventory management system automatically records all movements between the start date and the cutoff date, making the retroactive calculation traceable.

With Inventory ONE Record inventory using Barcode or QR Code Scan, the Mobile Inventory Count via App processed directly at the warehouse and received audit-compliant records at the touch of a button. Learn more on our pages about Inventory Software and Inventory management.

Frequently Asked Questions About Deferred Inventory (FAQ)

How long can the inventory be postponed?

Up to three months before or two months after the balance sheet date (Section 241(3) of the German Commercial Code (HGB)).

What is the difference between a pre-inventory and a post-inventory?

An early inventory count takes place before the cutoff date, while a late inventory count takes place after it. In both cases, the value is adjusted forward or backward to the cutoff date.

For which inventory items is deferred inventory not permitted?

For particularly valuable assets and inventory subject to uncontrollable shrinkage.

Series: An Overview of Inventory Types

This post is part of our series on inventory types. Here you'll find all related articles:

• Inventory Types – A Comprehensive Overview
• Continuous Inventory
• Point-in-Time Inventory
• Inventory by Sampling
• Postponed Inventory Count (this article)