Use
The FIFO value is determined from all FIFO-relevant goods receipts.
You use the FIFO method to define the stock that is to be valuated again, for example, the closing stock from the previous month or previous year. Beginning with the appropriate period, the system adds up all the quantities of goods received for each period until the closing stock is reached. Then the system adds up the value of the goods received. The last value to be added is determined in relation to the last quantity added.
The sum of the values of the goods received is the FIFO value.

At the end of the fiscal year, there are 1,500 pieces of a material in stock. The following FIFO-relevant goods receipts were posted in the individual periods of the fiscal year:
Period |
Quantity of goods received |
Value of goods received |
Price of goods received |
01 |
100 |
1000 |
10.00 |
02 |
200 |
2050 |
10.25 |
03 |
50 |
525 |
10.50 |
04 |
150 |
1525 |
10.17 |
05 |
100 |
1050 |
10.50 |
06 |
250 |
2600 |
10.40 |
07 |
300 |
3300 |
11.00 |
08 |
200 |
2250 |
11.25 |
09 |
150 |
1650 |
11.00 |
10 |
200 |
2350 |
11.75 |
11 |
400 |
4600 |
11.50 |
12 |
300 |
3500 |
11.67 |
Total |
2400 |
26400 |
The following table shows how the FIFO value is calculated:
Period |
Quantity |
Value |
Totaled quantity |
12 |
300 |
3500 |
300 |
11 |
400 |
4600 |
700 |
10 |
200 |
2350 |
900 |
9 |
150 |
1650 |
1050 |
8 |
200 |
2250 |
1250 |
7 |
250 |
2750 |
1500 |
Total |
1500 |
17100 |
Thus the price of the material according to the FIFO valuation is 17100 / 1500 = $11.40.
As a comparison: If the closing stock of the previous year was zero and no goods issues were posted for the material in the current fiscal year, the moving average price of the material at the end of the year would be 26400 / 2400 = $11.00.
Alternatively, the system can determine the FIFO value based on single receipts. You configure this using the FIFO method as well.
Tolerances
In exceptional circumstances, it can be that the stock to be valuated for a material is greater than the total of the receipt quantities. Reasons for this can be that not all goods receipts were relevant for FIFO or that part of the material was received a long time ago.
You can configure how the system is to react to this type of exceptional situation:
Define the tolerance interval by entering the appropriate percentage rates.