FIFO/LIFO valuation

[Former Member]

Hi all,

What are the configrations to be done for doing FIFO/LIFO valuation?

Once valuation is done, which report has to be executed to check the valuation?

Regards,

Jothi

[Former Member]

Means its does not effect weighted avergae and i get the details in fifo for reporting purpose only & del the data....

Many many Thanx

[Former Member]

Hi all,

Right now Client is Using FIFO Method but in sap client is ready to shifted to moving average method. client need reporting in FIFO also so he can prepare balance sheet manually for FIFO and through system he get balance sheet in moving average. How can i do it. Plz help me. is this above confrigation work for me??????

[Former Member]

hi,

FIFO is meant for balance sheet valuation only.

in material master accounting view-price control, you have to define either standard or MAP. this is mandatory.

so the material will be valuated based upon this price control. and when you run the fifo valuation, material relevant to fifo will be reflected in that.

do the following config and master data setup.

u2022 Activate/Deactivate LIFO/FIFO Valuation

u2022 Define LIFO/FIFO Valuation Level

u2022 Define LIFO/FIFO relevant Movement Types (x)

u2022 Define LIFO/FIFO Methods

u2022 Define FIFO Valuation Areas

u2022 Selection of Materials Relevant to FIFO (x) -

individual maintenance - material master - accounting 2 view (click on LIFO/FIFO relevant)

Collective maintenance - tcode: MRF4

u2022 Adopting Data Posted in a Posting Period (x) - t.code: MRF3 - dont forget to tick the update receipt data

u2022 Execute FIFO Valuation - MRF1

Displaying FIFO Valuation Data for a particular material - MR35

Changing FIFO Valuation Data - MR34

Displaying Change Documents - MRF2

Deleting FIFO Valuation Data - MRF5

[Former Member]

Dear,

Please visit at: http://help.sap.com/saphelp_40b/helpdata/ru/38/72369adc56d11195100060b03c6b76/frameset.htm

Regards,

Syed Hussain.

[Former Member]

Dear,

LIFO Valuation

LIFO (MM)

You can use LIFO procedure to determine a lower stock value for the balance sheet.

In a market with rising prices, it makes sense that the material stocks that were purchased last are issued first. This means that the lower stock values of the materials that were purchased first are included in the balance sheet.

You can run LIFO valuation for individual materials or for material pools. A LIFO pool consists of materials that are similar in unit of measure and value.

u2022 Procedure

- Quantities LIFO (Layers are based on quantity and value).

- Index LIFO (Layers are only based on value).

LIFO Valuation process

Identifying Materials

Materials that are to be included in LIFO valuation must be marked as relevant for LIFO.

If materials are grouped together in pools, you need to enter the pool number in the material

master record as well.

Creating the Base Layer

During the first year of LIFO valuation, you have to create a base layer, which includes the closing stock and the stock value of the material or LIFO pool.

Forming a Data Extract

If you start using the LIFO procedure during the fiscal year, you must form a data extract from all LIFO relevant documents.

Updating Mid-Year

For all LIFO relevant transactions/events, receipts and issue quantities and receipt values are registered and updated in monthly layers, which are aggregated and evaluated after the end of the fiscal year.

LIFO valuation

After the end of the fiscal year, annual layers are created for each material or pool if the receipt quantity is greater than the issue quantity. If the issue quantity is greater than the receipt quantity, the previous yearsu2019 layers for each material or pool are dissolved, until the base layer is reached.

There are 4 different valuation methods used in LIFO valuation.

Average delivered price for the settlement period

Average delivered price for part of the year (the first n periods)

Price on progressive fill-up basis

Price from the material master

From these procedures, you select the one that determines the lowest stock value for the balance sheet.

Lowest value comparison

After running LIFO valuation, you normally carry out a lowest value comparison. In this procedure, the valuation of the individual annual layers can be reduced again by the lowest values. The lowest net layer values that are determined are included in the balance sheet.

Displaying LIFO results

On the LIFO results display, the results of the valuation according to inventory accounting and the results of the valuation according to the LIFO procedure are compared. You can choose between gross LIFO values (without u2018lowest valueu2019 comparison) and net LIFO values (with the u2018lowest valueu2019 comparison). You can also have a weighted LIFO price updated in the material master.

Creating a Balance sheet using the LIFO results

The results of LIFO valuation are not automatically included in balance sheet valuation. You can therefore use a list of your balance values for each G/L account after LIFO valuation to make the necessary adjustment postings for the balance sheet manually.

Regards,

Syed Hussain.

[Former Member]

Dear,

Note: The belwo configuration settings are which I have done in our company based and required similar for any organizations to perform FIFO valuatoin.

FIFO (First In First Out) valuation is a method to evaluate the enterprise stock of a single or multiple materials as realistically as possible.

FIFO method to facilitates to be carried out inventory movements on first stocks of material to be received are first to be consumed.

The value of the stocks is therefore calculated based on the lasts stock received.

Advantages of FIFO valuation:

Periodic closing stock quantity and stock value for each material (subject to FIFO valuation maintained).

Carry out FIFO valuation with lowest value determination (If FIFO valuation carried out with lowest value option).

Total material stock value u2013 by each valuation area or company code.

Facility to update FIFO price in material master.

Revaluating the material that is, replacing the current value of the material with FIFO value.

Configuring FIFO valuation method

SPRO u2013 IMG u2013 MATERIAL MANAGEMENT u2013 VALUATION AND ACCOUNT ASSIGNMENT u2013 BALANCE SHEET VALUATION PROCEDURES u2013 CONFIGURE LIFO/FIFO METHODS u2013 GENERAL INFORMATION u2013 DEFINE LIFO/FIFO VALUATION LEVELS.

Transaction Code: OMWL

Basing on business requirements, select valuation level as Company code or valuation area (i.e Plant).

Note:

If valuation area selected as Company Code, all stocks of material exists in all valuations areas of company code will be evaluated. This ultimately results as only one FIFO price for a material in all valuation areas.

If valuation area selected as valuation area (plant), all stocks of material evaluated at valuation area level only of company code. This results that material has different FIFO prices in individual valuation of company code.

SPRO u2013 IMG u2013 MATERIAL MANAGEMENT u2013 VALUATION AND ACCOUNT ASSIGNMENT u2013 BALANCE SHEET VALUATION PROCEDURES u2013 CONFIGURE LIFO/FIFO METHODS u2013 GENERAL INFORMATION u2013 FIFO u2013 CONFIGURE FIFO VALUATION AREAS

Click (New entries) & enter your plant number need for FIFO Valuation Ex. 2210, and base year as current year Ex. 2008.

System carries out FIFO valuation only those areas maintained here.

FIFO valuation level

Valuation level of LIFO/FIFO valuation.

LIFO/FIFO valuation can be performed on two levels:

o Valuation at valuation area level (as with the conventional valuation method)

o Valuation at company code level.

You set the valuation level centrally in Customizing; depending on the Customizing setting, this field is either a company code or a valuation area.

Base year for LIFO/FIFO valuation

SPRO u2013 IMG u2013 MATERIAL MANAGEMENT u2013 VALUATION AND ACCOUNT ASSIGNMENT u2013 BALANCE SHEET VALUATION PROCEDURES u2013 CONFIGURE LIFO/FIFO METHODS u2013 GENERAL INFORMATION u2013 DEFINE LIFO/FIFO METHOD.

Transaction Code: OMWP

Setting parameters for FIFO valuation called FIFO Method.

The method can be defined with a 6 alphanumeric code.

The FIFO value to be determined on a single receipt aggregating all monthly basis receipts or a single receipt will assigned by checking/unchecking check box.

Which stock we want to valuate this method can be entered in quantity comparison. The options available are:

1. GJE u2013 End of the last fiscal year

2. VVM u2013 End of the posting period before last

3. VOM u2013 End of the last posting period

4. CUR u2013 Current Present.

SPRO u2013 IMG u2013 MATERIAL MANAGEMENT u2013 VALUATION AND ACCOUNT ASSIGNMENT u2013 BALANCE SHEET VALUATION PROCEDURES u2013 CONFIGURE LIFO/FIFO METHODS u2013 GENERAL INFORMATION u2013 DEFINE LIFO/FIFO RELEVANT MOVEMENTS TYPES.

SPRO u2013 IMG u2013 MATERIAL MANAGEMENT u2013 VALUATION AND ACCOUNT ASSIGNMENT u2013 BALANCE SHEET VALUATION PROCEDURES u2013 CONFIGURE LIFO/FIFO METHODS u2013 GENERAL INFORMATION u2013 ACTIVATE / DEACTIVATE LIFO/FIFO VALUATION.

Transaction Code: OMWE

Here to activate FIFO valuation method for Balance sheet.

Selecting Materials relevant to FIFO

Transaction code : MRF4 u2013 Select Materials

In the material master record of the concerned material, in account view 2 make sure the FIFO/LIFO u2013 relevant selected.

Regards,

Syed Hussain.