FIFO valuation is a method that enables you to valuate the stocks of a material as realistically as possible. FIFO (first in, first out) stands for the assumption that the first stocks of a material to be received are the first to be consumed. The value of the stock is therefore calculated based on the last stocks received.
FIFO valuation has a number of uses:
- Listing the FIFO values of certain materials.
When you run FIFO valuation, the system calculates the FIFO values of the materials concerned. The results are displayed in the form of a list that contains the following information:
-The closing stock quantity and closing stock value for each material for the period in question as well as the FIFO value and the difference between that and the stock value
-The net value based on lowest value determination (if you carry out FIFO valuation with lowest value comparison)
-The totals for each valuation area or company code by material stock account
-The totals by valuation area or company code
- Lowest value comparison of the FIFO value after determining the lowest price.
When you run FIFO valuation, you specify whether the system should also carry out a lowest price comparison.
- Updating the FIFO price (possibly after carrying out lowest value comparison) in the material master record.
When you run FIFO valuation, you specify whether the FIFO price should be updated in the material master record. You can use the tax and commercial price fields for this.
- Revaluating the material, that is, replacing the current value of the material with the FIFO value.
When you run FIFO valuation, you can change the material price directly or generate a batch input session to effect price changes.
See also:FIFO Value Determination Data Update During FIFO Valuation Introducing FIFO Valuation Carrying Out FIFO Valuation FIFO Valuation: List of Results Displaying FIFO Valuation Data Changing FIFO Valuation Data Deleting FIFO Valuation Data