Have Finance Questions? Ask a Financial Expert Online.
Welcome and thanks for your question!
You would only expense the amounts for the inventory sold during the year.
If you bought $50,000 in inventory and sold 50% this year, you would expense $25,000. The remaining $25,000 would be an inventory asset at the end of the year.
I have some clients that it do it annually and some that do it more frequently. It depends on the sophistication of the client and their financial reporting system.