Stock valuation (SAP Business One)

The process of estimating the value of all items in a warehouse.
The stock valuation in SAP Business One includes various methods for determining the inventory value, which have a direct impact on the Stock accounting and the Financial reporting have. The valuation method can be based on Article level as well as on Article group level be determined.

Valuation methods

SAP Business One offers three main methods for stock valuation:

Standard price: The stock is valued at a fixed, predefined price. A revaluation is required if the standard price changes.
Moving average: The inventory value is continuously updated using the weighted average price of incoming and outgoing goods.
FIFO (First In - First Out): It is assumed that the items stored first are withdrawn first, which means that the oldest stocks are used up first.

Inventory management

Depending on company requirements, a continuous or Non-continuous inventory management can be selected:

Continuous inventory management: Changes to stock automatically trigger financial transactions so that every stock movement is mapped in financial accounting.
Non-continuous inventory management: Stock movements are recorded but have no direct impact on the general ledger. The stock value is only updated by a manual stock valuation at the end of the period.

Valuation levels

The valuation can either be based on Article level or on Storage level take place:

Article level: An item has a standardised valuation regardless of its storage location.
Storage level: The stock value of an item is determined individually for each warehouse.

Relevance of the valuation method

The chosen valuation method has a significant influence:

The value of stock items in the balance sheet
The calculation of cost prices and sales prices
The financial reports and tax deferrals

Stock revaluation

If the Standard price of an article changes, is a Stock revaluation required to correctly map the current value.

Stock assessment reports

Various reports are available for analysing and evaluating stock levels:

Inventory valuation report: Shows stock values and quantities based on the selected valuation method.
Inventory audit report: Detailed overview of all stock movements with quantities, costs and cumulative values.
Stock report: Presentation of the current stock including valuation.
Inventory posting list: Records all stock additions and disposals with the respective prices.

Special cases

Articles subject to differential taxation: The purchase price must be assigned to a serial number so that the valuation is based on Serial number level takes place.
Articles in foreign currency: May require a special valuation logic.

Valuation in the disposition assistant

The in Article master The valuation method used is determined by the Disposition assistants taken into account in the inventory planning.

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