Inventory Reserve Accounting is the accounting process used to set aside and identify assets associated with products that are slow-moving or potentially obsolete. This practice allows companies to maintain accurate, up-to-date inventory records and manage their exposure to risk due to changing market conditions. By using this method, businesses can better plan for their future inventory purchases, project cashflow needs and properly account for any losses due to write-downs. In short, Inventory Reserve Accounting provides organizations with a more comprehensive view of their current holdings and potential liabilities.