Valuation Prices

The actual price that is used in inventory valuation and financial transactions performed on the item, for example, the standard cost of goods sold, inventory transfer, and the issue to work-in-process value.

The valuation price differs from the standard cost in the following ways:

• It is based upon one of the valuation methods ( fixed transfer price (FTP), last in, first out (LIFO), first in, first out (FIFO), moving-average unit cost (MAUC), and lot costing)
• It is based upon the economic value, and not on standard structures
• It is not necessarily a fixed price (differs according to the situation and the transaction)
• It is used for financial transactions and for accounting purposes