Valuation of items and work in process for France

On the Items form, you can define different Cost Methods, or stock valuation methods, that your company can use. If a user makes a change to the cost method that is used for an item, the change is noted for the JET report.

Note: Do not use the LIFO option as a cost method for any item.

You must check the valuation of items and work in process (WIP) regularly, either per period or at least once a year, using these forms:

Total Inventory by Account Report
Total WIP Value by Account Report

Inventory valuation is determined by calculating the stock quantity of the item and unit cost of the item, using the specified cost method The valuation of WIP is calculated as the sum of the work in process amounts of each job order.

At the end of the period, the results provided by these reports must be compared with those of the previous period to determine the inventory variation values. For this reason, the reports must be saved.

After you determine the inventory variation values for each of the reports at the end of the month, you must manually create ledger transactions to explain this inventory variation in the general ledger, as shown in these examples:

Example of transaction for goods: 37xx (debit) against 6037 (credit)
Example of transaction for goods WIP: 33xx (debit) against 7133 (credit)