Determining the Layer Value: Example
Receipt Quantities and Values for the Individual Periods of a Fiscal Year
When stock are valuated at the end of the fiscal year 1999, a layer containing 1000 pieces is created. Its value depends on the valuation base:
Price for Total Year
An average price is calculated from the LIFO receipts for the fiscal year. This price is used as the basis for valuation. Thus the value of the layer is calculated as:
Layer quantity x total value of goods received / total quantity of goods received
In the above example, the resulting value for the 1999 layer is: 1000 x 26400/2400 = 11000
Price for Partial Year
An average price is calculated from the goods received during a part of the fiscal year. This price is used as the basis for valuation. The partial year must start at the beginning of the fiscal year. Thus the value of the layer is calculated as:
Layer quantity x total value of goods received in the partial year / total quantity of goods received in the partial year
In the above example, the value of the layer depends on the definition of the partial year. For example, if the partial year consists of the first four periods, the resulting value for the layer 1999 is: 1000 x 5300/500 =10600
Price on a Progressive Fill-Up Basis
The values of goods received in individual periods are used, starting at the beginning of the year and added up until the layer stock is reached.
In the above example, the value would be calculated as follows:
Period |
Quantity |
Value |
Remaining quantity |
01 |
100 |
1000 |
900 |
02 |
200 |
2100 |
700 |
03 |
50 |
600 |
650 |
04 |
150 |
1600 |
500 |
05 |
100 |
1050 |
400 |
06 |
250 |
2600 |
150 |
07 |
150 |
1600 |
0 |
Total |
1000 |
10550 |
In period 07, only a part of the quantity is used for value formation; the value is calculated in proportion to the quantity.
(Instead of using receipt values for a period, you can calculate the value based on individual receipts. You can configure this in the LIFO Method , provided that you created a document extract beforehand).
Material Master Price
An average price is calculated from the closing stock quantity and the corresponding value. This price is used as the basis for valuation. With individual LIFO valuation, this price corresponds exactly to the moving average price.
Layer value = layer quantity x value of the closing stock / closing stock quantity