Inventory valuation is essential for accurate financial reporting, tax compliance, and business planning. It helps calculate the cost of goods sold and ensures proper asset management. Common methods include FIFO (first-in, first-out), LIFO (last-in, first-out), weighted average cost, and specific identification for high-value items. To value inventory, businesses should count all items, choose the right method, adjust for damaged or obsolete stock, and record it in their accounting system. Using digital tools can simplify tracking, reduce errors, and improve decision-making.

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