Actual Value

The actual value represents the current market value of the items in inventory. The actual value of inventory is calculated based on either the net sales value method or the replacement cost basis. It is compared to the acquisition cost to determine the financial inventory value.

The user determines whether the net sales value or the replacement cost is used. Refer to Enable Inventory Valuation.

Net Sales Value

This is the goods’ market value. In M3, it is calculated as a percentage of the sales price.

Inventory Depreciation

Goods that have remained in stock for a long time, or run the risk of doing so, may become obsolete. Accordingly, those goods must be depreciated (written down.) This is done by calculating future demand based on historical usage. The historical usage is grouped into buckets, or time periods, with each group corresponding to one or more buckets. Depreciation can then be specified in percent for each group.

Replacement Cost

This is the cost a company incurs to replace or build current inventory.