diff --git a/erpnext/stock/report/incorrect_stock_value_report/test_incorrect_stock_value_report.py b/erpnext/stock/report/incorrect_stock_value_report/test_incorrect_stock_value_report.py
new file mode 100644
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+++ b/erpnext/stock/report/incorrect_stock_value_report/test_incorrect_stock_value_report.py
@@ -0,0 +1,56 @@
+# Copyright (c) 2026, Frappe Technologies Pvt. Ltd. and Contributors
+# See license.txt
+
+import frappe
+
+from erpnext.stock.doctype.stock_entry.stock_entry_utils import make_stock_entry
+from erpnext.stock.doctype.warehouse.test_warehouse import create_warehouse
+from erpnext.stock.report.incorrect_stock_value_report.incorrect_stock_value_report import execute
+from erpnext.tests.utils import ERPNextTestSuite
+
+COMPANY = "_Test Company with perpetual inventory"
+
+
+class TestIncorrectStockValueReport(ERPNextTestSuite):
+	"""Correctness tests for the Incorrect Stock Value report.
+
+	The report is a corruption detector: it walks stock account postings and flags
+	dates/vouchers where the stock ledger value diverges from the GL balance. Clean,
+	balanced perpetual transactions keep ledger value == GL balance, so they must
+	never surface as discrepancy rows.
+	"""
+
+	def run_report(self, **extra):
+		filters = frappe._dict(
+			company=COMPANY,
+			from_date="2026-01-01",
+			to_date="2026-12-31",
+		)
+		filters.update(extra)
+		return list(execute(filters)[1])
+
+	def test_balanced_account_has_no_discrepancy(self):
+		warehouse = create_warehouse("_Test ISV WH", company=COMPANY)
+		account = frappe.get_value("Warehouse", warehouse, "account")
+		item = "_Test Item"
+
+		make_stock_entry(
+			item_code=item,
+			to_warehouse=warehouse,
+			qty=10,
+			basic_rate=100,
+			company=COMPANY,
+			posting_date="2026-02-01",
+		)
+		make_stock_entry(
+			item_code=item,
+			from_warehouse=warehouse,
+			qty=4,
+			company=COMPANY,
+			posting_date="2026-03-01",
+		)
+
+		rows = self.run_report(account=account)
+
+		offending = [row for row in rows if row.get("warehouse") == warehouse or row.get("item_code") == item]
+		self.assertEqual(offending, [], f"Balanced perpetual account flagged as incorrect: {offending}")