As the year-end closing period is approaching, it is necessary to review the accounting tasks that company needs to face off during this time.
One of the important tasks is inventory of balance sheet assets/liabilities.
Support of the balance sheet items with inventory has been obligatory for several years by Hungarian Accounting Act. As a result, the inventory policy, as part of the accounting policy commitment is required by law. In this policy the enterprise itself is obliged to set-up frequency and process of inventory of certain assets and liabilities. The regulation is not very specific about this matter, but it is obligatory to do inventory at least every three years, also with quantitative inventory of all asset.
The purpose of the inventory is to document all assets and liabilities in company accounts, regardless of whether the company has a continuous quantitative record of the asset group or not during the year. However, the inventory can take place (very rare case) at the exact reporting date.
The law – in some cases – gives possibility to carry out inventory in preceding quarter and the following quarter. In these cases to prepare correct supporting inventory documentation, actual quantitative data should be updated and modified by the movements before/after actual quantitative motions, so to ensure the reported asset groups authenticity.
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