Valuation: Controlling Valuation at Retail (Retail Method)
Use
All events and transactions that result in a change in the stock lead to an update of the value of the stock at cost and retail in Inventory Management. With valuation at retail, therefore, you do not have to maintain a special table usually referred to in the field as the retail stock ledger to update the retail value of the stock.
The data usually maintained in a retail stock ledger, such as the starting stock, the total goods receipts or total markdowns in a period, can be analyzed in the Retail Information System (RIS). The RIS is updated every time a change is made to the quantity or value of the stock.
Prerequisites
Features
To determine the retail value at which goods movements are valuated, the system runs the sales price determination function. To determine the retail value (net without tax), subtotal 3 is used in the calculation schema concerned (for further information, see
Using the Condition Technique in Calculating and Determining Prices).To determine a price, the system searches for valid retail price conditions. The retail value of a goods movement is calculated as follows:
Retail value of movement = quantity moved ´ retail price as per condition
The cost value is calculated depending on the type of Inventory Management:
The cost value of the goods movement = quantity moved ´ valuation price from the article master (usually the moving average price).
The cost value of the goods movement = retail value of quantity moved ´ cost value of the value-only article from the article master / retail value of the value-only article from the article master.
Since the cost and the retail values are constantly updated when any transactions or events take place that change the value or quantity of the stock, you can find out the current stock margin at any time in the article master. The cost multiplier, that is the ratio between the cost and retail value of an article, can change as a result of price changes on the purchasing or sales side. This change is taken directly into account in inventory valuation in the system.
A special promotion price usually exists for promotional merchandise. If split valuation is active (in the case of inventory management on a value-only basis), you must always enter a valuation type.