Inventory Identification

To value the stock, you must be able to identify the items in the inventory. Possession of legal title of inventory is a fundamental criterion for determining whether items should be reflected in the inventory of a seller or a buyer. However, possession of title does not necessarily coincide with actual physical possession of the goods. For example, title to goods that are in the possession of a common carrier and in transit from the seller to the buyer should remain in the inventory of the seller until delivered. The integration of the various systems ensures that you can identify the entire inventory.

Many companies consolidate items into groups of similar items for stock valuation purposes. This process is called pooling or product consolidation. When you pool items, you can apply a single purchase price and associated costs to all items in that pool.

Whether each item is valued separately or as a pool varies from industry to industry. The JD Edwards EnterpriseOne Advanced Stock Valuation system enables you to value by individual items, pools, or both.

Many companies maintain contracts with other companies to store bulk product. Therefore, bulk stock might be commingled and belong to more than one owner. The JD Edwards EnterpriseOne Advanced Stock Valuation system enables you to exclude commingled stock from the valuation.