Inventory taking as of the balance sheet date can be carried out under three different inventory timing systems:
- (Near-date) balance sheet inventory: within ±10 days of the fiscal year-end,
- Early or late inventory: up to three months before or up to two months after the balance sheet date,
- Perpetual inventory: stocktaking is performed continuously throughout the fiscal year.
Regarding the methods of inventory taking, the following approaches are permitted:
- Full physical inventory count,
- Book-based or document-based inventory procedures,
- Inventory sampling,
- Or a combination of the three above.
The combination of different inventory timing systems with the sampling method is explicitly permitted. Since inventory sampling usually involves significantly lower effort and cost than a full count, it is frequently used in combination with the early inventory approach. Combining inventory sampling with the perpetual inventory method is also possible, although this can be more complex due to potential changes in stock levels and structure during the counting period. Regardless of the chosen timing system, it is essential that a reliable inventory reconciliation process is in place.
In practice, the date of execution of inventory sampling often raises questions—especially regarding its permissibility outside the standard three-month period before the balance sheet date. If the inventory results from a perpetual or an early inventory sampling are equivalent in quality, then conducting inventory sampling outside the three-month windowmay be permissible, provided it is coordinated with the responsible auditor or tax advisor.
This also applies to perpetual inventory sampling conducted outside the standard period—even if, in theory, it is only performed on a single day. In such cases, a compelling argument can often be made for the validity and compliance of the sampling procedure. sample outside this timeframe can be valid if the inventory reconciliation is reliable.