Reviewed by CA Nikhil Gupta · Last reviewed 14 October 2026
Allocate SKU demand by first-expiring-first-out batches and estimate expiry loss, disposal costs and separate NRV indicators. Verify the inputs and export your calculation bridge.
Finin2min example scenario · Enter your own verified data.
Inputs are illustrative assumptions. This tool is not professional tax, accounting, legal, safety or contractual advice.
Enter your data. A negative variance or loss is displayed rather than hidden.
First-expiring-first-out dispatch prioritises the earliest permitted shelf-life date among eligible lots of the same product. It is different from FIFO purchase-cost accounting. The calculation sorts each SKU’s batches by their time remaining to expiry, then allocates expected demand to earlier batches before later batches. Physically quarantined or noncompliant stock must not be treated as available.
A total product-level inventory figure can conceal one lot that expires next month and another that remains usable for two years. Averages obscure the exposure. The calculator therefore requires a SKU, unique batch reference, unit count, expiry horizon, rate of demand, inventory cost and disposal assumption for every inventory lot.
All batches with the same SKU must use the same monthly forecast. If 35 units are expected monthly and a batch expires after two whole months, at most 70 units of that SKU’s cumulative demand can be allocated before expiry. Demand already assigned to older batches is subtracted when evaluating later batches. The assumption is steady, deterministic demand.
A batch with zero months remaining receives no projected sales in this tool. Its entire quantity is counted as at risk and its disposal cash cost is shown separately. Expired food must not be offered for sale under applicable FSSAI definitions; other sectors may also require quarantine, destruction or mandatory return procedures.
Forecast expiry exposure equals the cost of units projected not to sell before expiry plus assumed disposal cash. A separate NRV shortfall indicator equals opening units multiplied by the excess of unit cost above estimated unit net realisable value, floored at zero. These are different management/accounting lenses and should never be added together automatically.
Ind AS 2 describes NRV as estimated selling price in the ordinary course less estimated completion and selling costs. A simple manually entered unit NRV allows a what-if comparison, but it does not establish when an impairment exists, what the accounting reporting date is, or whether the entity applies another accounting framework.
The sample has two ITEM-A batches expiring in two and five months, each using a forecast of 35 units per month. The earlier lot receives the first 70 expected customer units; remaining demand over the five-month horizon can then flow to the later batch. ITEM-B has 60 units with zero months left and therefore no modelled sell-through.
The model cannot see cold-chain deviations, batch recalls, moisture ingress, product returns, legal labelling status or quality-control holds. Expiry remaining is just one constraint. If a lot cannot legally or safely be distributed, quarantine it regardless of the commercial forecast shown in the tool.
Re-run with 20% lower monthly demand and a slower season. Large amounts of short-dated stock may justify earlier lawful sales-channel plans, validated transfers, supplier-return discussions or reduced future procurement. A discounted sale may affect NRV, margin and customer promises; do not assume discounts permit expired-stock sales.
Reconcile quantities to cycle counts, capture batch and expiry from the ERP, verify per-unit costs, check demand forecast version, confirm quality releases, and document write-offs with approval. Actual disposal requires records under sector-specific rules. Preserve exported CSV results alongside the batch ledger and management assumptions.
The tool uses whole months and assumes uniform monthly demand. Fractional months, weekly peaks, reservations, minimum dispatch shelf-life, category-specific non-sale thresholds and cross-warehouse reallocation are not modelled. It is a first-pass working-capital risk screen, not an accounting journal, inventory system or food-safety authority.
When two batches share an SKU, cumulative demand is assigned to the batch expiring first. An earlier batch may be only partly exhausted at its deadline; the next batch receives the forecast demand still available before its own expiry. The formula requires the same demand assumption for both batches. If monthly volumes are seasonal, replace the one-rate projection with a detailed week-by-week sales plan outside this calculator. A month remaining is an intentionally coarse bucket and should not override the date printed on a product label.
An early lawful discount can sometimes accelerate demand, but a lower selling price may reduce net realisable value and gross margin. Do not assume all customers will accept a short-dated product, that a retailer can bypass minimum remaining shelf-life policies, or that a distributor return is contractually available. For food, distribution of expired goods is not an acceptable mitigation. Any stock subject to quality hold, recall or temperature failure should be isolated from sale forecasts immediately, even if expiry dates remain distant.
At reporting date, reconcile batch-level quantities to the stock ledger and document whether NRV is supported by market evidence and sale-specific costs. Review whether cost can be recovered through an enforceable supplier return; recognise any cash recovery only when supported by evidence and appropriate accounting treatment. After approval, link the inventory write-off or credit note to the physical goods movement and destruction certificate where required. Forecast expired stock cost and an NRV reduction may refer to the same units, so combining them as two independent charges would overstate exposure.
No. The outputs are illustrative management figures requiring document verification and professional review.
Yes. Every number is editable and the exported CSV records the calculated bridge.
Negative outcomes are displayed rather than suppressed. Verify the assumptions and investigate the underlying transactions.
No. Actual decisions depend on current law, evidence, agreements, and professional judgement.
Sources explain the calculation conventions and rules referred to above. Notifications and standards change; confirm on the official site before you file, book or advise.
Educational working tool. Results follow the scope and assumptions described on this page and the figures you enter; they are not accounting, audit, tax, legal, investment or financing advice. Treatment depends on facts, contracts and the law or standard in force for the relevant period, so reconcile to your records and consult a qualified professional before you rely on a result.
Background, worked examples and the rules behind these numbers.