Market value (SAP Business One)

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The market value is an estimated value that reflects the realisable price of an asset on the market under normal conditions. In SAP Business One, it is based on related concepts such as market price, fair value or replacement value, using the same principle of realisable value.

Detailed explanation/description:

In SAP Business One, market value is not a defined system term, but the principle of realistic and market-oriented value determination is reflected in several functions and processes.

In the Stock valuation influence methods such as the moving average price or FIFO the balance sheet inventory value directly. These methods determine the costs at which stock disposals are valued, which has a direct impact on profit and cost price.

Additionally enable landed prices (Landed Costs) a more precise valuation of imported items by allocating transport, insurance or other additional costs to the stocks.

in the Production module standard production costs serve as the basis for pricing finished goods, even if they are not included in inventory valuation.

in the Sales and purchasing process the price is determined using price lists, special prices or discounts. The respective price source can be traced in the document. This pricing also represents a realisable value, which can vary greatly depending on the business relationship. When determining the Gross profit these prices are compared with the respective cost price.

In the area of asset accounting The valuation is based on acquisition or production costs. The current carrying amount is adjusted on an ongoing basis through amortisation and possible revaluations.

With Foreign currency transactions SAP Business One offers functions for revaluing foreign currency balances on the basis of current exchange rates. This is crucial for the correct presentation of open items and balance sheet valuations in the local currency.

These different functions ultimately pursue a common goal: the most realistic, comprehensible and market-orientated valuation of assets in the company.