How to Check the Stock Value of Quarantine Stock

Check the purchase order or invoice for the quarantine stock. Quarantine stock is normally valued at the total cost of acquiring the good, just like any other inventory item. For a retailer, cost of goods is usually the wholesale price. If the business is a manufacturer, add in the value of direct labor allocated per unit to the purchase price of the raw materials used to make the item.
Add shipping charges paid when the stock was originally purchased. Allocate a portion of the freight costs on a per-unit basis. Suppose you want to quarantine an item that cost $20 and came in as part of a shipment of 200 units with a shipping cost of $100. Divide the shipping cost by the number of units to get a unit shipping cost of 50 cents. Allocate this amount and you have a value for the quarantine stock of $20.50.
Calculate the market value of the quarantine stock if it has lost value because it is obsolete, damaged or defective. Generally accepted accounting principles state that the market value of the quarantine stock may not be more than the net realizable value, meaning the price you can sell the item for minus disposal and carrying costs. Also, the write-down amount can’t be less than the NRV minus the item’s normal profit margin.
Call the supplier of the quarantined item and ask for the current replacement cost. Adjust the value of the quarantine stock to the lower of the replacement cost or the market value from Step 3.