Forensic accounting & loss quantification
Inventory Loss Assessment
Inventory loss assessment is the forensic reconciliation of quantities, costs, and obsolescence to determine how much inventory value was destroyed, stolen, or degraded during a defined event. It supports property claims, business interruption calculations that depend on COGS, and criminal or civil proceedings involving shrink.
Why inventory disputes arise
Perpetual inventory systems may not reflect physical reality after a disaster. Cost layers (FIFO, weighted average) complicate valuation at the date of loss. Carriers may dispute obsolete or unsalable SKUs.
Methodology
We reconcile perpetual records to physical counts or photo-documented destruction, apply appropriate costing, and segregate salvage. When counts are impossible, we use statistical sampling or bill-of-materials reconstruction.
Outcomes
Clear inventory schedules improve property claim accuracy and prevent downstream errors in BI margin assumptions.
Related services
Pairs with insurance claim support, business interruption loss analysis, and retail or manufacturing industry pages.
Related services
Frequently asked questions
How do you value inventory after a total loss when counts are impossible?expand_more
We use perpetual records, purchase history, bills of materials, and photo or video documentation; when needed we apply sampling or SKU-level reconstruction. Salvage and obsolescence are segregated so property and BI models stay consistent.
Why do carriers challenge inventory claims?expand_more
Common issues include stale cost layers, mixed damaged vs. undamaged stock, related-party purchases, or lack of tie-out between warehouse systems and GL. We build reconciliations that trace quantities and dollars to source documents.
How does inventory tie to business interruption?expand_more
COGS and margin assumptions in BI models often depend on accurate inventory and spoilage adjustments. Fixing inventory first prevents compounding errors in lost-profit calculations.