Skip to Content
author's profile photo Former Member
Former Member

FIFO valuation

Dear experts,

Kindly explain how the system calculates FIFO Valuation for single receipt.

FIFO Valuation Based on Single Receipts

When you use single receipts as a basis, the system splits up the values from invoices among the goods receipts in chronological order on a progressive quantity fill-up basis.



FIFO receipt value

1st goods receipt

20 pieces


= $240.00

2nd goods receipt

80 pieces


= $860.00

The FIFO value of the two goods receipts is calculated as follows:

$200.00 + (20 pieces x $100.00 / 50 pieces) = $240.00 or

$800.00 + (30 pieces x $100.00 / 50 pieces) = $860.00

The FIFO value of the closing stock is thus 30 pieces x $860.00 / 80 pieces = $322.50.

Add a comment
10|10000 characters needed characters exceeded

Related questions

1 Answer

  • Best Answer
    author's profile photo Former Member
    Former Member
    Posted on Jul 21, 2009 at 08:09 AM


    As I Understood, Please check Below:

    See the above table which not posted in your question.

    PO raised for 100 Pcs @ 10 $ each...

    1st Goods received 20 pcs @ 200 $ (basing on PO price 10$ each)

    2nd Goods receipt 80 pcs @ 800 $ (basing on PO price 10$ each)

    Hope the above is clear...

    Invoice received for 50 pcs @ 12 $ each (that means 2 dollar extra for each item compare with Purchase order price), the extra amount of 100 $ is posted to stock at the time of Invoice posting)


    Now rest is : Goods issue is 70 Pcs

    Closing stock 30 pcs (out of 100 pcs goods receipts)

    If you take periodic FIFO calculation: 1100 for 100 pcs (that is considering both PO price 10 $ and Extra 2 $ invoice receipt price).

    Basing on this above Closing stock value for 30 pcs = 30 pcs x 1100 $ / 100 pcs = which coming 330 $ (for 30 pcs).


    If you take single base as FIFO valuation:

    For 20 pcs = $ 240 (this value including 50 pcs Invoice receipt difference)....... OK

    For the rest 80 pcs = 860 $ (this including only 30 pcs price variance basing on Invoice. Because already you included 20 pcs in above calculation. So out of 50 pcs invoice, 20 pcs you included above and remaining is only 30 pcs. So its takes the calculation of 30 pcs difference plus rest as you mentioend in your formula).



    Syed Hussain.

    Add a comment
    10|10000 characters needed characters exceeded

Before answering

You should only submit an answer when you are proposing a solution to the poster's problem. If you want the poster to clarify the question or provide more information, please leave a comment instead, requesting additional details. When answering, please include specifics, such as step-by-step instructions, context for the solution, and links to useful resources. Also, please make sure that you answer complies with our Rules of Engagement.
You must be Logged in to submit an answer.

Up to 10 attachments (including images) can be used with a maximum of 1.0 MB each and 10.5 MB total.