The below article will explain one of the approaches through which Inventory can be valued on FIFO basis in SAP -
We have two approaches to present our Inventory on FIFO basis -
1. Batch Input Method - A batch capturing the Receipt Value and the Quantity for every GR is maintained in the system. At the time of Goods Issue, the system will fetch the value from the batches in the ascending order.
2. Balance Sheet Valuation Method - In this approach, the goods are valued at the Moving Average Price throughout the period and at the Period-end date, an adjustment entry is posted to bring the inventory at the FIFO method.
I will discuss the configuration steps of Balance Sheet Valuation Method here.
Before beginning with the configuration of this approach, let me explain with an example for what exactly this approach will do -
We have two approaches to present our Inventory on FIFO basis -
1. Batch Input Method - A batch capturing the Receipt Value and the Quantity for every GR is maintained in the system. At the time of Goods Issue, the system will fetch the value from the batches in the ascending order.
2. Balance Sheet Valuation Method - In this approach, the goods are valued at the Moving Average Price throughout the period and at the Period-end date, an adjustment entry is posted to bring the inventory at the FIFO method.
I will discuss the configuration steps of Balance Sheet Valuation Method here.
Before beginning with the configuration of this approach, let me explain with an example for what exactly this approach will do -
