Inventory accounting does factor in ‘shrink’, which is for stuff which gets stolen. To put it simply, when stuff gets stolen, it’s recorded as an expense and a decrease in inventory, simultaneously; that expense is reported with typical Cost of Goods sold, so it usually still reduces a company’s bottom line by the amount stolen.
What happens after that varies company to company, but usually there isn’t much they can do. It’s not like bad debt expense, where it (the bad debt) can be packaged and sold to some company that hopes to collect on some of the debt at a big discount, companies just have to eat the cost of shrink.
Inventory accounting does factor in ‘shrink’, which is for stuff which gets stolen. To put it simply, when stuff gets stolen, it’s recorded as an expense and a decrease in inventory, simultaneously; that expense is reported with typical Cost of Goods sold, so it usually still reduces a company’s bottom line by the amount stolen.
What happens after that varies company to company, but usually there isn’t much they can do. It’s not like bad debt expense, where it (the bad debt) can be packaged and sold to some company that hopes to collect on some of the debt at a big discount, companies just have to eat the cost of shrink.