Analysis of Inventory Reserves

The purpose of this template is to determine how much of the inventory allowance is deductible for tax purposes and to calculate the M-1 adjustment.

Entering Information

All of the information needed to produce the calculations is entered on the Input worksheet. The yellow highlighted cells are calculated fields, and no data should be entered in these cells.  Gray cells are not calculated fields, but data should not be entered in these cells.

Enter the following information:

  • Beginning balance of allowance for inventory
  • Ending balance of allowance for inventory
  • Inventory charge-offs
  • Additions for obsolete inventory
  • Additions for excess inventory
  • Inventory offered for sale at reduced value
Analysis of Inventory Reserves