How to Reduce the Value of Obsolete Parts

Overview

If you have obsolete or slow-moving parts, you may decide to reduce their value to reflect current worth.

Navigator can run a routine to reduce selected part numbers by a set percentage.

This guide explains how the process works and what you must do before and after the write down.

Why This Matters

Obsolete stock that remains at full value:

• Overstates your balance sheet

• Distorts stock valuation

• Impacts gross profit reporting

• Affects year end accounts

Reducing the value ensures your accounts reflect true stock value.

Step 1: Identify the Parts to Be Written Down

Before requesting the routine:

• Confirm the part numbers

• Ensure they are genuinely obsolete

• Confirm they are not currently being sold

• Agree the percentage reduction required

Example:

• Reduce value to 10 percent of current value

• This equals a 90 percent write down

Be clear whether you are reducing by a percentage or reducing to a percentage.

These are not the same.

Step 2: Confirm the Write Down Percentage

Decide:

• Are you reducing by 90 percent?

• Or reducing to 10 percent of current value?

Example:

Current value £100
Reduce to 10 percent → New value £10
Reduce by 10 percent → New value £90

Confirm this clearly before the routine is run.

Step 3: Freeze Movement (If Possible)

During the routine:

• Avoid selling or booking these part numbers

• Ideally pause parts activity for a short window

This prevents movement while the valuation is being updated.

Step 4: Stock List Before the Routine

Before running the routine, export a full stock list.

This gives you:

• A record of original values

• An audit trail

• A comparison for reconciliation

Keep this report for your accountant.

Step 5: Run the Write Down Routine

Support will:

• Apply the agreed percentage

• Adjust the selected part numbers

• Provide a new stock list after adjustment

Step 6: Post the Nominal Adjustment

The routine adjusts stock value.

You must then adjust your nominal accounts.

Typical posting:

• Credit Parts Stock

• Debit Parts Write Off or Stock Adjustment account

Confirm the correct nominal with your accountant.

After posting, your:

• Stock list total

• Parts stock nominal

Should match.

Step 7: Reconcile After Adjustment

After the routine:

1. Run a fresh stock valuation report

2. Confirm the new total

3. Confirm your nominal posting matches

4. File both before and after reports

This completes the audit trail.

Common Mistakes

• Confusing reduce by vs reduce to percentage

• Not exporting a stock list before adjustment

• Posting to the wrong nominal

• Allowing parts movement during the routine

Key Takeaways

• Always confirm the percentage clearly

• Always export stock before and after

• Always post the nominal adjustment

• Always reconcile after the change