Stock valuation methods
Accounting techniques used to determine the value of the products in a distribution point.
Planon ProCenter supports four different stock valuation methods:
First-in First-out (FIFO)
A valuation method in which the product that moves into the distribution point first, also moves out first.
FIFO is often used for products which have an expiry date or products that degrade in quality with time.
FIFO is often used for products which have an expiry date or products that degrade in quality with time.
For more information, see Adding a Product > Stock valuation methods.
With FIFO, the value of the stock item is calculated from the sum of the (rounded) remaining value of the (non-depleted) batches.
For more information, see Rounding of the average stock value.
Example: the following example illustrates how FIFO based stock valuation is calculated.
• Purchase price(s) of a product as on:
1st January = 100 and 1st June = 110
1st January = 100 and 1st June = 110
• Ordered items received (total 30 items) on:
• - 5th of January = 10
• - 5th of June and = 10
• - 5th of August = 10
• 2 items are issued on 1st February.
10 items are issued on 1st of July.
Stock value based on FIFO:
- 5th Jan: 10 * 100 = 1000 (average price (1000 / 10) = 100)
- 1st Feb: (10 - 2) * 100 = 800 (average price (800 / 8) = 100)
- 5th June: (10 - 2) * 100 = 800 (batch of 5th Jan)
(10 * 110) = 1,100 (batch of 5th June)
- Total stock value = 1,900 (average price (1900 / 18) = 105, 5556)
- 1st July: (10 - 2 -8) * 100 = 0 (batch of 5th Jan - all issued/sold)
- 1st July: (10 - 2 -8) * 100 = 0 (batch of 5th Jan - all issued/sold)
(10 - 2) * 110) = 880 (batch of 5th June)
Total value 880 (average price (880 / 8) = 110)
- 5th August: (10 - 2 -8) *100 = 0 (batch of 5th Jan - all issued/sold)
(10 - 2) * 110) = 880 (batch of 5th June)
(10 - 0) * 110) = 1,100 (batch of 5th August)
Total value 1.980 (average price (1,980 / 18) = 110)
 | The value of the delivered products is determined on the basis of the batch from which they are taken. |