Valuation methods

You use the header information to define your valuation method codes. Valuation method codes are applied to product-site records. For each valuation method code you define which valuation methods are to apply, and how margins are to be calculated.

Method

You use this block to define the primary and secondary valuation methods to be used for the defined valuation code. You can define a single or a maximum of two valuation methods per valuation code. Both methods are maintained by the stock transactions, or movements.

You can also choose whether the value of your stock is to be updated by internal stock movements and whether average costs are to be recalculated.

Average costs are only recalculated using the primary valuation method.

Click the magnifying glass icon to define the rules for the defined primary and secondary stock valuation method.

Margin

You use this block to define which cost will be used for calculating margins on sales against the value of your stock.

Project management

Project budget lines can be initialized by using the detailed cost breakdown structure of manufactured products requested on project material tasks. You use this block to define the default product valuation method to be used by the Project management budget lines generation process (via the Generate budget lines action in the function (GESPJM)).

You can define a single or a maximum of two valuation methods per valuation code. Both methods are maintained by the stock transactions, or movements.

Stock valuation methods

The supported methods of stock valuation  are as follows:

• Standard cost - The stock value is based on a fixed cost by site. The standard cost is applicable for a complete fiscal year.
• Revised standard cost - The stock value is based on a revised standard cost, calculated by the actual cost of each stock movement. The revised standard cost is applicable for a specific range of dates.
• Last price - The stock value is based on the actual cost of the last stock transaction.
• Average cost - The stock value is based on the average value of received stock and the total value of stock in hand.
• Average lot price - The value of stock is based on the average value of each lot and sublot received.
• FIFO - The stock value is based on the first in, first out method of turnover using the unit cost of each stock movement.
• LIFO - The stock value is based on the last in, first out method of turnover using the unit cost of each stock movement.

The LIFO method of stock valuation may be unacceptable in certain countries.

In some cases, even within the same company, the valuation rule can vary. This can depend upon the combination of product and product-site. As a rule, however, the selected method of stock valuation is based upon consistency and tax rules.

Valuation

You use this block to define the standard rules for valuing stock movements.

• Valuation/Receipt source - Valuation rule applied.
• Valuation/Receipt alternative - Alternative valuation rule. Used to manage exceptional cases where the source calculation results in a null value.

 When the valuation rule is for a standard cost valuation (or updated standard cost), if the system does not find a value for the current year it automatically searches previous years for a value (last existing cost ignoring the current year). The alternative value is only used if no cost is returned.

Counts

You use this block to define rules for valuing physical stock movements.

• Quantity variance - Valuation rule applied.
• Alternative - Alternative valuation rule. Used to manage exceptional cases where the source calculation results in a null value.

Standard rules

You use this block to define additional valuation rules.

• Receipt price adjustments - Used to adjust prices during the invoicing of a receipt or during the production cost price calculation for a work order. This adjustment can update the average price of the product if it is within the tolerances defined by the MAXABSCOD - Valuation variance absorption and MAXABSPER - Maximum percentage of over-absorption parameters (STO chapter, VAL group).
• Zero price authorized - Used to authorize a stock movement transaction that has a blank value.

Receipt valuation exceptions

You use this table to define exceptions to receipt values for the following stock movements:

• Miscellaneous receipts
• Supplier receipts
• Work order receipts
• Delivery returns
• Inter-site transfers
• Stock reintegrations 

Stock movements will be valued as follows:

Receipts:

Movement type	Valuation method	Value
Miscellaneous receipt	Standard cost	Standard cost
	Revised standard cost	Revised standard cost
	Last price	Price of the last receipt
	Average cost	Average cost
	Order cost	Price entered on the receipt line
Supplier receipt	Standard cost	Standard cost
	Revised standard cost	Revised standard cost
	Last price	Price of the last receipt
	Average cost	Average cost
	Order cost	Price of the purchase order or price entered on the receipt (if direct receipt, for instance).
Inter-site transfer receipt	Standard cost	Standard cost
	Revised standard cost	Revised standard cost
	Last price	Price of the last receipt
	Average cost	Average cost
	Order cost	Price of the issue movement at the source site.
Work order receipt	Standard cost	Standard cost
	Revised standard cost	Revised standard cost
	Last price	Price of the last receipt
	Average cost	Average cost
	Order cost	Provisional cost calculated on work order creation (as defined by the CSTRCPORD - Provisional cost declaration parameter (GPA chapter, COS group)).
Inter-site transfer receipt	Standard cost	Standard cost
	Revised standard cost	Revised standard cost
	Last price	Price of the last receipt
	Average cost	Average cost
	Order cost	Price of the issue movement at the source site.
Inter-company transfer receipt	Standard cost	Standard cost
	Revised standard cost	Revised standard cost
	Last price	Price of the last receipt
	Average cost	Average cost
	Order cost	Price entered on the receipt
Shipment return	Standard cost	Standard cost
	Revised standard cost	Revised standard cost
	Last price	Price of the last receipt
	Average cost	Average cost
	Order cost	Issue price
Receipt on Assembly	Standard cost	Standard cost
	Revised standard cost	Revised standard cost
	Last price	Price of the last receipt
	Average cost	Average cost
	Order cost	Sum of the issue movements
Receipt on disassembly	Standard cost	Standard cost
	Revised standard cost	Revised standard cost
	Last price	Price of the last receipt
	Average cost	Average cost
	Order cost	Price entered on the line (this is recovered automatically if it is an original assembly).
Reintegration	Standard cost	Standard cost
	Revised standard cost	Revised standard cost
	Last price	Price of the last receipt
	Average cost	Average cost
	Order cost	Issue price