Physical inventory on the date of commencement of activity
If you are setting up a company and intend to keep a revenue and expense ledger, it is necessary to draw up and register a physical inventory as at the date of starting your business activity. This also applies to entrepreneurs who are partners in companies.
What does the physical inventory include at the start of business?
The physical inventory on the day of starting activity covers all items purchased prior to the establishment of the company, i. e. merchandise, goods and basic raw materials, auxiliary materials, semi-finished products, as well as shortages and usable waste. It does not, however, include the company's assets, fixed assets or equipment such as computers, furniture or cars. Physical inventory on the day of commencement of activity does not have to be reported to the tax office.
If you do not have any items that need to be included in the inventory on the day you start up your business, you must still prepare it by entering "zero" as the first entry in the revenue and expense ledger.
Please note that the obligation to prepare an inventory also exists:
- as of 1 January (unless it was prepared at the end of the year),
- at the end of each tax year,
- in the event of a change of shareholder,
- if the proportion of shareholders'shares has changed,
- as of the date of liquidation of the operations,
- in the event of losing the right to lump-sum income tax during the tax year
The intention to make an inventory at a different time than on 1 January, 31 December and on the day of commencement of business activity the appropriate head of the tax office must be notified in writing at least seven days before the date of its preparation.
Elements of the physical inventory
The physical inventory should contain at least the following:
- name and surname of the establishment owner (company name),
- the date of preparation of the inventory,
- the consecutive item number of the physical inventory sheet,
- the detailed identification of goods and other elements,
- unit of measurement,
- the quantity recorded at the time of the inventory,
- price in zlotys and groszy per unit of measure,
- value resulting from multiplying the quantity of goods by its unit price,
- the total value of the physical inventory,
- the clause 'Inventory ended on item....',
- signatures of the persons compiling the inventory and the signature of the establishment owner (shareholders).
The valuation methods of elements of inventory can be done:
- according to purchase prices or market prices on the date of drawing up the inventory if they are lower than purchase prices (relates to materials and merchandise goods);
- according to the cost of producing semi-finished products, finished goods and shortages of own production;
- according to the value of products resulting from an estimation based on the suitability for further use of waste that have lost their original value in use in the course of business.
VAT payers, who were entitled to deduct the tax on the purchased goods, value the elements of the inventory at net prices.
Note! The physical inventory should be drawn up in a careful and permanent manner and completed and signed by the persons participating in the inventory.
- Regulation of the Minister of Finance of 26 August 2003 on keeping a revenue and expense ledger
- The Personal Income Tax Act of 26 July 1991