Moving the count date: counting before or after the balance sheet date

In many companies the balance sheet date is 31 December, and that day is rarely suited to counting. Year-end business is at its peak, holidays and leave thin out the staff, and accounting is busy with the closing. Practice therefore knows a way out: counting takes place on a day near the balance sheet date, and the stock at the balance sheet date is calculated from the count result and the documented movements. If the count date lies before it, this is called bringing the count forward; if it lies after it, moving the count back. How far the count date may be from the balance sheet date is determined by the requirements of your head office and by your auditor. This article is about the principle and the practice.

The principle: calculate, do not guess

• When the count is brought forward, counting takes place before the balance sheet date. The counted stock is rolled forward to the balance sheet date: counted stock plus receipts minus issues after the count date.
• When the count is moved back, counting takes place after the balance sheet date. The counted stock is rolled back: counted stock minus receipts plus issues after the balance sheet date.

The value of the stock at the balance sheet date then follows from the quantity at that date. The valuation is done by accounting, not by the count team.

A worked example (fictional)

Suppose an item has an actual stock of 1,130 pieces on 31 December.

• Count brought forward: counting takes place on 15 December, result 1,250 pieces. Up to 31 December, 400 pieces come in and 520 go out. Calculation: 1,250 + 400 − 520 = 1,130.
• Count moved back: counting takes place on 8 January, result 980 pieces. Between 1 and 8 January, 150 pieces come in and 300 go out. Calculation: 980 − 150 + 300 = 1,130.

Both routes lead to the same result, but only if the movements between count date and balance sheet date are recorded completely and with the correct date. Any unposted, wrongly dated or back-dated document distorts the result and is noticed only when the auditor recalculates.

Prerequisites for shifting the count

• Reliable document handling: every movement between count date and balance sheet date has a date, an item and a quantity.
• A reasonable distance between count date and balance sheet date, confirmed in advance by auditor and head office.
• A traceable roll-forward or roll-back per item or item group, which forms part of the record as a document of its own.
• Written coordination with the auditor and head office before the count, not after.

For particularly valuable or shrinkage-prone items an auditor may ask for a count closer to the balance sheet date or for additional controls. Ask about this before you fix the date.

Typical mistakes when shifting

• Movements after the count date are carried out in the warehouse but posted in the system only days later, or they get the posting date instead of the actual date.
• Transfers within the warehouse are counted as receipt and issue although the total quantity does not change.
• The roll-forward is made only at total level and not per item, so individual deviations disappear.
• The count date is so far from the balance sheet date that nobody can survey the movements in between.

When shifting makes sense in Uzbekistan

For warehouses in Uzbekistan several reasons speak for a count date away from 31 December: the dispatch peaks at year end, the New Year holidays, leave periods and the fact that warehouse staff and accounting are busy with the annual closing at the same time. On the other hand, local accounting may set requirements of its own for the count date that differ from those of head office. Clarify this with the local chief accountant before you commit. Shifting is worthwhile only if the document flow in 1C or the ERP system is kept cleanly by date.

In short

Shifting the count relieves the turn of the year, but it demands clean documents and early coordination. AuditMaster plans the count date together with you and, if you wish, agrees the approach in advance with your controlling team or your auditor. The inventory record and count sheets then provide a reliable basis for the roll-forward or roll-back.