Use

Some countries only allow you to manage layers in pool LIFO valuation on a value basis. This procedure allows you to combine materials in a pool without having to first convert the materials to a single unit of measure. This is particularly advantageous for the formation of very large pools. The index LIFO procedure is used for valuation of layers managed on a value basis only.

Features

With the index LIFO procedure, the value of a pool is considered separately for each settlement period. The value of the pool at the end of the settlement period is converted to the price level of the base year using a price index and compared to the base value of the current layer.

If the converted value is greater than the base value for the current layer, a layer is created for this settlement period.

If the converted value is smaller than the base value, the preceding layers are reduced, starting with the most recent (see the example).

With the index LIFO procedure, you can determine the price index as follows:

Before carrying out pool valuation, you must manually enter a price index for each pool in the annual data for the layer.

When carrying out pool valuation, the system calculates the price index automatically. For each material in the pool, the price at the end of the previous settlement period is divided by the price at the end of the previous year. An average price index is formed for each pool from these material-specific price indexes. This is used when valuating the pool.