what is inventory accounting 
inventory accounting is the body of accounting that deals with valuing and accounting for changes in inventoried assets a company s inventory typically involves goods in three stages of production raw goods in progress goods and finished goods that are ready for sale inventory accounting will assign values to the items in each of these three processes and record them as company assets assets are goods that will likely be of future value to the company so they need to be accurately valued in order for the company to have a precise valuation inventory items at any of the three production stages can change in value changes in value can occur for a number of reasons including depreciation deterioration obsolescence change in customer taste increased demand decreased market supply and so on an accurate inventory accounting system will keep track of these changes to inventory goods at all three production stages and adjust company asset values and the costs associated with the inventory accordingly 