As stock cannot physically be transferred from one location to another instantly, it is recorded as being in transit. This reflects the physical location of the item, being transported to the new location.

During this time, it’s still considered to be owned by the location it departed, and as such should be included in any inventory valuation on that location.

Once the items are delivered to the new location, then they are receipted in and the quantity and value become part of the inventory valuation of the receiving location.