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Former Member

LIFO/FIFO relevancy

Dear all,

In material master accounting view 2, there is one tab LIFO/FIFO-relevant.

what is the relevancy of this checkbox?

Pl explain it in detail..

thanks

Ranjeetsinh

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3 Answers

  • Aug 21, 2007 at 05:14 AM

    Dear Mr.Ranjeet,

    As far I know very rarely this is used.

    This is related to valuation as per the movement type.

    But i will suggest you to post the same in

    MM/FI forums.

    Please check the help from SAP.

    LIFO/FIFO-relevant

    Determines whether the material or the movement type is relevant to LIFO and FIFO valuation.

    Movement type

    A classification key indicating the type of material movement (for example, goods receipt, goods issue, physical stock transfer).

    The movement type enables the system to find predefined posting rules determining how the accounts of the financial accounting system (stock and consumption accounts) are to be posted and how the stock fields in the material master record are to be updated.

    LIFO

    LIFO valuation procedure

    The separate valuation of the increase or decrease in the stock quantity of a material for different accounting periods (for example, fiscal year or month). (LIFO is the abbreviation of "last in, first out".)

    The LIFO valuation procedure for stocks (inventories) is based on the assumption that the material acquired most recently is used or consumed first. When new stock is acquired or consumed, there is no change in the value of older stocks. As a result, price inflation cannot lead to an overvaluation of older stocks. Phantom (illusory) profits are thus avoided.

    Regards

    Mangal

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    Former Member
    Aug 21, 2007 at 06:07 AM

    Hi Ranjeet,

    Its how materials are issue or dlv to customer , FIFO or LIFO

    settings need to made in OMWL and Movement type

    Thanks

    Bala

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    • Former Member

      Hi Bala ,

      But if the material is batch managed then as per the batch selection & sorting strategy the material will be selected....... in that scenerio what relevancy that this indicator will serve.......

      Thanks

      Kaushik

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    Former Member
    Oct 19, 2008 at 11:00 AM

    LIO/FIFO relevant :If this indiacator is set.it means that the material is subject to LIFO/FIFO valuation for alance sheet valuation.

    LIFO valuation :-for stochk implies that as new stock comes in and than moves out first ,the old stock value does not change in value and trhere is no valuation of older stock.

    FIFO valuation calcualtes the valuation of the stock based on the price of the last receipt .Although tis is most realistic valuation ,it can overvaluate older stock.

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