Shrinkage is a reduction in actual inventory quantity caused by events such as theft, damage or deterioration. It differs from a write-down in which the goods remain physically present but have lost value.[1]
A counting discrepancy warrants investigation; it does not automatically prove theft. Check receiving, transfers and units of measure too. Record established causes distinctly so that operational losses are not hidden inside undifferentiated inventory adjustments.
Content updated:
Sources
Compiled with AI assistance using public sources. General explanation, not individual legal or tax advice. Describing a concept does not mean Zoloo offers it as a feature.