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Re: FIFO inventory valuation impact on finances

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Hello Govind

 

The Inventory Cost will be used for all the transactions pertaining to the material. The Cost Type such as Estimated cost are just for calculation and will not be used in any financial postings. For e.g. after the cost estimation, you find that the Estimated cost is more appropriate than the current inventory cost.You could update the inventory cost from either of these cost type using the run.

 


Hence the cost types which are just meant for the information purpose and will not be used in financial postings. You use these cost types to derive the appropriate cost for the material and you might later update it to inventory cost.

 

Regarding the impact, there are two types of documents which are generated whenever you change the inventory manually or automatically.

 

1. Automatic Change of Material Cost

2. Manual Change of Material Cost

 

 

Thanks

Parveen


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