Your landlord refuses to renew your lease, you are selling your business (fonds de commerce, the business as a going concern: goodwill, lease rights, fixtures, clientele), or you have to draw up an inventory for an estate: in each of these situations, the value of the stock enters the calculation. When the stock grows year after year, it suggests that some items sell poorly. The gap between the book value and what the goods would really fetch can then become significant. This article presents six approaches to get close to the market value of old stock, then applies them to a worked example.
Why book value is not enough
In French accounting, assets acquired for consideration are recorded at their acquisition cost (Commercial Code, article L. 123-18). Stock that has not been written down therefore appears on the balance sheet at what it cost, not at what it is worth today. A pair of jeans bought for €30 ten years ago is still carried at €30, whether it resells at €80 as a sought-after piece or at €5 in a clearance lot.
In eviction cases, the question arises in a particular way. The compensation due to an evicted tenant under a French commercial lease must cover the loss caused by the refusal to renew (Commercial Code, article L. 145-14). Among the ancillary heads of this statutory eviction compensation (indemnité d’éviction), the Charte de l’expertise en évaluation immobilière (the French property valuation charter, 6th edition, November 2025, Title III, §1.19) lists the “loss on stock”, which covers the loss suffered when stock is sold at a low price. So it is not the value of the stock that is compensated, but the loss suffered in liquidating it. To quantify it, one needs to know both what the stock is worth in normal trading and what it would fetch in a hurried sale.
Six approaches to valuing old stock
1. Current market value
Look for the price at which similar items sell today: online sales sites, marketplaces, competing shops. This approach reflects what customers are actually willing to pay and is easy to implement with online tools. It becomes time-consuming for a large inventory and difficult for rare or very specific items.
2. Liquidation value
Estimate the price at which the stock could be sold quickly, in bulk or in a clearance sale. This price is almost always below market value. The Charte recalls, for buildings, that there is no standard discount between a forced sale and market value: any discount depends on the exact circumstances (Title III, §1.12). The reasoning holds for stock. In practice, discounts of 30 % to 70 % are seen, depending on demand and on the condition of the items. This approach is prudent and useful for a closure or an eviction; on the other hand, it can seriously undervalue stock that would have found a buyer given time.
3. Selling price discounted for age
Start from the original selling price and apply a discount that rises with the age and condition of the items. An indicative scale might be:
- under one year: 0 to 10 % discount;
- 1 to 2 years: 10 to 30 %;
- 2 to 5 years: 30 to 50 %;
- over 5 years: 50 to 80 %.
This method takes account of depreciation over time and allows an item-by-item reading. It assumes the original selling price is known, and the rate adopted involves a degree of judgement that must be justified.
4. Value in use
Assess what the items still contribute to the business: loss leaders that draw customers, references that complete a range, pieces that build the shop’s image. This strategic value is real but hard to quantify. It is reasoned by estimating the effect of these items on overall sales and customer loyalty.
5. Stock turnover
Calculate the turnover rate of each family of items (annual sales divided by average stock). A high turnover justifies a value close to the selling price; a low turnover justifies a larger discount. The approach relies on actual sales data, which makes it robust before a court. It requires a detailed history and may penalise seasonal or collector’s items that sell rarely but well.
6. Replacement cost
Estimate what it would cost today to buy or produce equivalent items, by asking suppliers or researching current costs. This approach is useful when the value of the items has risen over time, as happens with some vintage pieces. It ignores market demand, however: an item that is expensive to replace may not find a buyer.
Worked example: a vintage clothing shop
The stock is made up of three families:
- 50 Levi’s 501 jeans from the 1990s, bought at €30 each;
- 20 leather jackets from the 1980s, bought at €100 each;
- 100 printed t-shirts from the 2000s, bought at €10 each.
The book value, at acquisition cost, is €1,500 + €2,000 + €1,000 = €4,500.
Current market value. Jeans €80 × 50 = €4,000; jackets €150 × 20 = €3,000; t-shirts €25 × 100 = €2,500. Total: €9,500.
Liquidation value (50 % discount). Jeans €40 × 50 = €2,000; jackets €75 × 20 = €1,500; t-shirts €12.50 × 100 = €1,250. Total: €4,750.
Discounted selling price (60 % discount given the age). Jeans €32 × 50 = €1,600; jackets €60 × 20 = €1,200; t-shirts €10 × 100 = €1,000. Total: €3,800.
Value in use. If these vintage pieces draw customers and generate additional sales, 120 % of market value can be adopted, so €9,500 × 1.2 = €11,400.
Stock turnover. Jeans and jackets turn over twice a year, t-shirts half a time. Jeans €4,000 and jackets €3,000 are kept at market value; t-shirts are discounted by 50 % for low turnover, so €1,250. Total: €8,250.
Replacement cost. Jeans €60 × 50 = €3,000; jackets €200 × 20 = €4,000; t-shirts €15 × 100 = €1,500. Total: €8,500.
Depending on the method, the same stock is worth between €3,800 and €11,400, against a book value of €4,500. The spread is not an anomaly: each method answers a different question.
Which method to use, depending on the context
The Charte recalls that no method is universal and that the choice depends on the valuation assumptions. For stock, the context guides the selection:
- Eviction compensation: the loss on stock is measured by the gap between the value of the stock in normal trading (market value, possibly weighted by turnover) and its liquidation value. In the worked example, that gap would be around €8,250 − €4,750 = €3,500, to be adjusted for the actual time available before leaving.
- Sale of the business: the stock is most often sold separately, on a joint inventory, at a price that reflects turnover and age.
- Insurance: replacement cost is the natural reference.
- Inheritance or tax return: market value at the date of death, corrected for unsaleable items, is generally the most defensible.
In every case, the expert states the method used, the discounts applied and their justification. That is what allows the reader of the report, and where relevant the judge, to follow the reasoning.
Further reading
Valuing the stock is part of the wider valuation of the business and of the compensation that goes with it: see the Business and company shares page. Two articles complete this subject: eviction compensation for a photo shop in a shopping centre and decontamination costs, which are not a head of ancillary eviction compensation.
What next
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Sale, contribution, divorce of a business owner, withdrawal of a partner, wealth tax: premises, business and shares valued together, with the consistency banks and the tax authorities expect.
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