Inventory valuation
Requirement
Inventories are to be valued at the lowest of acquisition cost and market value. According to ASC 330-10 acquisition cost value can be calculated using LIFO, FIFO, or Average method.
M3 solution
M3 supports a specific period-end function that can be configured to fulfill the legal requirement regarding inventory valuation. For each inventory item, a specification of the calculated values is available online and an accounting adjustment voucher is created.
Configuration guidelines
| Program ID | Program name | Description or comment |
|---|---|---|
| CAS020 | Settings - Inventory Value Variances | |
| CAS025 | Settings. Inventory Valuation | |
| CRS395 | Accounting Rule. Set | Rules for accounting adjustments at the end of the period for inventory valuation |
| CRS630 | Accounting Identity. Open | Accounts that are used for cost and value adjustments |
| CAS180 | Inventory Value. Open | Valuation at the end of the period, with comparison of inventory cost and value |
| CAS400 | Historic Actual Cost. Calculate |