Lowest Value Determination
Use
To valuate a material for balance sheet purposes according to the lowest value principle , you require various physical inventory prices . These prices are used to calculate the value for balance sheet valuation. The system provides various procedures for lowest value determination:
You can use any combination of these procedures. For example, you can first determine the lowest value based on market prices and then devaluate the result of this procedure based on lowest value determination based on the movement rate.
Before you valuate materials according to the lowest value principle, you must consider the following:
How do you use the physical inventory price fields in the material master record?
Do you want to carry out lowest value determination based on market prices?
Do you want to carry out lowest value determination based on movement rate?
Do you want to carry out lowest value determination based on range of coverage?
Do you want to combine the individual procedures, and if so, how?
Which period do you want the documents for analysis to be taken from?
How do you want to compare the various prices determined?
Do you want the materials to be revaluated in accounting based on the lowest value determination?
See also: