Stocktaking (inwentaryzacja) is a key part of running a business: it lets you check the actual level of stock against the accounting records. Shortages and surpluses found in the process have to be settled properly, and the method differs depending on the type of bookkeeping you keep. Getting this right matters for correctly determining the company's financial result and for settling taxes.
Inventory differences can be either culpable or non-culpable, and this directly affects how they are treated for tax-deductible costs and taxable revenue. Businesses keeping full accounting have detailed accounting procedures at their disposal, while those using the KPiR (tax revenue and expense ledger) follow simplified recording rules.
Inventory differences are discrepancies, found during a physical count, between the actual quantities of particular stock items and the quantities shown in the current accounting records. All differences revealed must be explained and settled in the accounting books of the financial year in which the stocktaking date fell
Settlement in full accounting
Businesses keeping full accounting have a detailed chart of accounts that allows inventory differences to be settled precisely. The process starts with correctly classifying the shortages and surpluses found, followed by recording them properly in the books.
Until they are finally settled, inventory differences in the form of shortages and surpluses are recorded in dedicated accounts. Shortages go to account 241/0 Settlement of shortages and damage, and surpluses to account 241/1 Settlement of surpluses.
The Accounting Act requires entities keeping accounting books to explain and settle differences between the actual state and the state shown in the books. Responsibility for this process lies with the entity itself, not with the tax authorities or administrative courts
Types of shortages and how to book them
Inventory shortages fall into several categories, each requiring a different accounting approach. The basic division is into justified and unjustified shortages, with the latter further divided into undisputed and disputed ones.
Justified shortages arise from causes beyond the business owner's will and control. These may be natural losses resulting from the nature of the goods, losses caused by random events, or other circumstances outside the business's control.
- Identify the cause of the shortage
- Carry out an investigation
- Classify the shortage as justified or unjustified
- Make the appropriate accounting entry
- Document the whole process in a report
Booking justified shortages is relatively simple: the value is transferred from the settlement account to a cost account. The entry is: debit account 731 Value of goods sold at purchase prices, credit account 241/0 Settlement of shortages and damage.
Unjustified shortages are divided into undisputed and disputed, depending on the position of the person with material responsibility. If that person agrees to repay the value of the shortage, the shortage is undisputed
Undisputed and disputed shortages
Unjustified undisputed shortages occur when the person with material responsibility agrees to cover the value of the missing items. In that case, the receivable is transferred from the settlement account to the employee settlements account.
The entry is: debit account 234 Other settlements with employees, credit account 241/0 Settlement of shortages and damage. This allows the inventory difference to be settled quickly and smoothly.
Unjustified disputed shortages arise when the person with material responsibility does not agree to cover the value of the shortage. In that situation the matter has to be taken to court, which is reflected in the corresponding accounting entry.
For disputed shortages, the value is transferred to the account for receivables pursued in court. The entry is: debit account 246 Receivables pursued in court, credit account 241/0 Settlement of shortages and damage
Settling inventory surpluses
Inventory surpluses are the opposite of shortages: the actual stock is higher than shown in the accounting records. These differences also have to be settled, by increasing the stock and recording the corresponding item in the settlement account.
The basic entry for warehouse surpluses is: debit account 33 Goods, credit account 241/1 Settlement of surpluses. This brings the accounting records into line with the actual state and documents the source of the increase in stock.
| Type of difference | Debit account | Credit account | Characteristics |
|---|---|---|---|
| Justified shortage | 731 | 241/0 | Tax-deductible cost |
| Undisputed shortage | 234 | 241/0 | Repayment by the employee |
| Disputed shortage | 246 | 241/0 | Pursued in court |
| Surplus | 33 | 241/1 | Increase in stock |
Stocktaking dates in full accounting
The Accounting Act sets out precisely the dates and frequency of stocktaking of goods, which is crucial for the accounting system to work properly. The rules differ depending on the type of stock and how it is stored.
For stocks of materials, goods, finished products and semi-finished products held in guarded storage areas and covered by quantity-and-value records, stocktaking is carried out once every two years. For stocks of goods and materials covered by value records at retail outlets, stocktaking is required once a year
The stocktaking and its results must be properly documented and linked to the entries in the accounting books. All differences revealed between the actual state and the state shown in the books must be explained and settled in the accounting books of the financial year in which the stocktaking date fell.
Settlement in the KPiR ledger
Businesses keeping the KPiR use a simplified recording system without detailed stocktaking procedures. The regulation on keeping the KPiR (from 1 January 2026, the regulation of 6 September 2025, Journal of Laws (Dz.U.) 2025 item 1299) does not provide for stocktaking within the meaning of the Accounting Act, but it does require a physical inventory count (spis z natury), among others as at 1 January and at the end of each tax year (§ 20 section 1). It is during this count that shortages or surpluses may come to light. Recording the results of the count in the KPiR is part of our accounting services.
When shortages are found, you reduce costs in column 12 of the KPiR (until the end of 2025, column 10) Purchase of goods for resale and materials at purchase prices. The correction is made by entering the value of the shortages in red or with a minus sign, based on the stocktaking report.
At the same time, the value of non-culpable shortages, which are tax-deductible costs, should be entered in column 15 (until the end of 2025, column 13) Other expenses, also based on the stocktaking report. This allows inventory differences to be settled correctly in the simplified recording system
Recording surpluses in the KPiR
The value of surplus goods found increases business revenue, so it must be entered in column 10 of the KPiR (until the end of 2025, column 8) Other revenue based on the stocktaking report. This is because surpluses constitute revenue from free-of-charge benefits.
- Shortages reduce costs in column 12 of the KPiR (until the end of 2025, column 10)
- Non-culpable shortages increase costs in column 15 of the KPiR (until the end of 2025, column 13)
- Surpluses increase revenue in column 10 of the KPiR (until the end of 2025, column 8)
- All changes must be documented in a report
- Instead of stocktaking, a mandatory physical inventory count (among others as at 1 January and at the end of the tax year). What documenting a fixed asset stocktake involves is explained separately.
Unlike under the Accounting Act, taxpayers keeping the KPiR have no stocktaking dates – the dates of the physical inventory count are set by § 20 section 1 of the regulation. Shortages and surpluses revealed during the count must be properly recorded in the books.
Impact on taxable revenue and costs
A key aspect of settling inventory differences is their effect on the tax base. Not every shortage can be a tax-deductible cost, and not every surplus has the same tax consequences.
Only non-culpable shortages can be tax-deductible costs. This means the business owner must show that they exercised due diligence to avoid the loss, and that it nonetheless occurred for reasons beyond their control.
An exception to the rule that non-culpable shortages are tax-deductible covers losses resulting from losses of excise goods not covered by an excise duty exemption, and the excise duty on those losses. Such losses cannot be tax-deductible costs (Article 23 section 1 point 44 of the PIT Act, Article 16 section 1 point 47 of the CIT Act)
Documenting non-culpable shortages
Inventory shortages are not expressly listed among the expenses that are not tax-deductible, but deducting them depends on there being a link between the cost and earning revenue, and on proper documentation.
A trading company selling fruit and vegetables carried out stocktaking at the end of the financial year. Shortages of PLN 15,000 were found, caused by the natural process of produce rotting despite proper storage conditions. The owner documented compliance with warehouse procedures and treated the loss as a tax-deductible cost, as a non-culpable shortage.
Non-culpable losses in current assets caused by random events, as well as natural losses and shortages, are tax-deductible costs. These events must, however, be properly documented, which means an investigation has to be carried out.
To treat the losses as a tax-deductible cost, it is not enough simply to establish the actual quantity of goods held. You need an investigation into the cause and circumstances of the discrepancy that makes it possible to establish clearly that the loss occurred despite due diligence.
Tax authorities state in their rulings that only losses which are unavoidable in a given type of business are tax-deductible costs. These are losses that are a normal, though unwanted, consequence of operating in a given industry, and a taxpayer who wants to deduct them should prove that they are a normal consequence of the business
Treatment of inventory surpluses
Tax authorities as a rule treat surplus goods found as revenue from free-of-charge benefits – for CIT based on Article 12 section 1 point 2 of the Corporate Income Tax Act; in the Personal Income Tax Act the equivalent is Article 14 section 2 point 8. Revealing warehouse surpluses essentially means finding that the taxpayer holds more goods than their stock records show.
As a result, the surplus goods are considered to have been received free of charge, which means their value must be included in taxable revenue. This follows from the logic of the tax system, under which all increases in assets should be taxed appropriately.
Documenting inventory differences
Proper documentation of inventory differences is crucial for settling them correctly for tax and accounting purposes. The documentation must be complete and reliable, and must make it possible to establish clearly why the shortages or surpluses arose.
The basic document is the stocktaking report, which should contain detailed information about the physical count, the differences found and the results of the investigation. The report is the basis for the accounting entries and for the tax settlement.
- Prepare a stocktaking report with a precise description of the differences
- Investigate the causes of the differences
- Classify shortages as culpable or non-culpable
- Make the appropriate entries in the books
- Take into account the impact on the tax base
The Accounting Act requires the stocktaking and its results to be properly documented and linked to the entries in the accounting books (Article 27 section 1). In practice, the stocktaking report should contain information about the members of the stocktaking team, the scope of the count and a detailed list of the differences found
Practical aspects of settlement
In practice, settling inventory differences requires taking into account many factors that may affect the final treatment. The type of business, the specifics of the industry and the warehouse procedures used all matter.
Businesses in industries with natural losses of goods have more scope to treat shortages as tax-deductible costs. This applies, for example, to food retail, where a certain level of losses is unavoidable because of the limited shelf life of products.
The approach to inventory surpluses also varies, as they may result from recording errors, unrecorded deliveries or other technical causes. If a surplus cannot be explained by a recording error (for example an unrecorded delivery), it is as a rule taxable revenue, which requires it to be settled properly.
