Calculation of Inventory Value

Before you start

• FAM function CA60 for inventory valuation is defined in 'FAM Function. Open' (CRS405).
• The inventory valuation account (alternative 1 selected in the 'Inventory account' field), and accounts for debiting and crediting inventory valuation variances are defined in 'Accounting Identity. Open' (CRS630).Parameters for inventory valuation variances are set in 'Settings - Inventory Valuation' (CAS025).
• Accounting string for entry of inventory valuation variances are defined in 'Settings - Inventory Value Variances' (CAS020).
• Sorting orders for calculating depreciation of net sales value are defined in 'Settings - Cost Accounting' (CAS900).

Follow these steps

1. Create inventory valuation proposal

   Inventory valuation proposals are created in 'Inventory Value. Open' (CAS180). The information is defaulted from the supplier or item agreements, the item file, and from Product Costing.

   If net sales value is used as inventory value, the future depreciation of net sales values is also calculated. The necessary parameters for this must be set in 'Settings - Inventory Valuation' (CAS025).

2. Review inventory valuation proposal

   The inventory valuation proposals are printed from 'Inventory Value. Open' (CAS180) for review. The basic data, the calculation method for acquisition or actual value, and new inventory values can all be changed in a proposal. Several proposals can be processed simultaneously to determine the valuation results using different methods.

3. Approve inventory valuation proposal

   The proposal can be approved when no more changes are needed.

4. Update general ledger

   The approved inventory valuation proposal can then update the general ledger using 'Inventory Value. Open' (CAS180). An accounting journal is then printed.