Inventory writedown cogs
Be sure to use the same values that were on the books for the inventory, not the sale price of the lost items. In order to account for inventory shrinkage, you'll also need to determine the value of the inventory lost. Total the value of the missing inventory. Ask your employees about how many bags have been damaged and determine if this number could be due to factors other than theft.
X Research source Retail companies should have procedures and policies in place to deal with spoilage, damage, and obsolescence automatically if these cause significant shrinkage. Cracking down on theft will not necessarily reduce these other factors. Common causes of inventory shrinkage are theft, spoilage, obsolescence, damage, and display (items that have been put on display and are no longer fit for consumption).However, you can't assume that all of the difference is due to theft. A large shrinkage is cause for alarm and should be further investigated. Be careful to attribute this shrinkage to the correct causes.This difference between the inventory on the books and physical inventory is referred to as inventory shrinkage. In nearly all cases, the physical count will be lower (a higher count usually points to errors in the counting).
Compare the physical inventory count to the account balance on the books.