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FIFO based Inventory Valuation in Public cloud

Lokesh_Mahajan
Explorer
0 Kudos
323

Hello Community members,

Our client needs inventory valuation on basis of FIFO method, please guide us how it can be achieved in public cloud.

 

FIFO based Consumption of material having Price control V and Material Type ROH

  1. GR at Different Price
 

Qty

Rate

Amount

GR1

1000

45

45000

GR2

1000

50

50000

Total

2000

47.5

95000

 

  1. Standard System behavior

Issue

1500

47.5

71250

Remaining

500

47.5

23750

 

 

 

95000

 

  1. As per Requirement shared by client

first GR

1000

45

45000

Second GR

500

50

25000

 

 

 

70000

Remaining

500

50

25000

 

As 2000 Qty of Material is purchased at two different rates, while doing goods issue (consumption) of 1500 Qty Material system should issue first 1000 Qty @45 rate and second 500 Qty @50 and remaining invetory value should be 25000 for Qty 500@50 

As per above scenario valuation should be done on FIFO basis and same should be reflected in report MB5B ( Stocks on Posting Date) or Analyze stocks in Date Range.

MB5B à

Lokesh_Mahajan_0-1708621105384.png

Analyze stocks in Date Range

Lokesh_Mahajan_1-1708621105402.png

Lokesh_Mahajan_2-1708621105434.png

 

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0 Kudos

FIFO Valuation is available in SAP Public Cloud:

Below are the steps to achieve that requirement which is mostly raised by the clients:

1.Flagging FIFO Check Box in Material Master:

In the material master accounting 2 view, FIFO check box can be marked individually as well as in mass via App: Schedule Inventory Accounting Jobs 

MuhammadHumayunFICO_0-1737526631558.png

2. Execution of FIFO Valuation:

We run FIFO valuation via APP: Execute FIFO Valuation by selecting the method that meets our requirement along with other parameters which can be seen in the below screenshot.

MuhammadHumayunFICO_1-1737527406631.png

Below are the different methods which can be selected:

MuhammadHumayunFICO_2-1737528196591.png

There are multiple FIFO methods and you can select anyone of them as per your requirement but there are two most common to calculate FIFO values based on goods receipts: – monthly receipts and single receipts:

    • Monthly receipts: This option aggregates goods receipts by month and updates the total. For each material and valuation level, you will see the aggregated receipt value for each month.

 

    • Single receipts: This option updates goods receipts for a given material separately at the receipt level. You can see the individual receipt values for each material and valuation level.

 3. Display FIFO Valuation:

you can display the results in the APP: FIFO Results:

MuhammadHumayunFICO_3-1737529298904.png

Conclusion:

This requirement is one of the most frequent asked by the SAP customers and SAP Public Cloud has offered this to facilitate its customers. 

Regards,

Muhammad Humayun

SAP FICO Managing Consultant