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[IMP] Inventory valuation method (FGI review)

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Spec:
- In accounting doc remove the last three topics and replace them by the memento. They all head to the old memento.

- add links to new memento in following page: https://www.odoo.com/documentation/user/9.0/inventory/routes/strategies/removal.html

- The following doc topic "What costing method should you use? (standard, average, fifo)" heads to the former memento https://www.odoo.com/documentation/functional/valuation.html#costingmethod
This memento does not answer this complex question at all actually. Please remove it.

- The introduction text should be before "Costing Method" title:
Every year your inventory valuation has to be recorded in your balance sheet. This implies two main choices:
the way you compute the cost of your stored items (Standard vs. Average vs. Real Price);
the way you record the inventory value into your books (Periodic vs. Perpetual).

- New definition for FIFO (right side):
For Real Price (FIFO, LIFO, FEFO, etc), the costing is further refined by the removal strategy set on the warehouse location or product's internal category. The default strategy is FIFO. With such method, your inventory value is computed from the real cost of your stored products (cfr. Quantitative Valuation) and not from the cost price shown in the product form. Whenever you ship items, the cost price is reset to the cost of the last item(s) shipped. This cost price is used to value any product not received from a purchase order (e.g. inventory adjustments).
FIFO is advised if you manage all your workflow into Odoo (Sales, Purchases, Inventory). It suits any kind of users.

- Add definition for LIFO method:
For Real Price (FIFO, LIFO, FEFO, etc), the costing is further refined by the removal strategy set on the warehouse location or product's internal category. The default strategy is FIFO. With such method, your inventory value is computed from the real cost of your stored products (cfr. Quantitative Valuation) and not from the cost price shown in the product form. Whenever you ship items, the cost price is reset to the cost of the last item(s) shipped. This cost price is used to value any product not received from a purchase order (e.g. inventory adjustments).
LIFO is not permitted outside the United States.

- New definition for Average Price:
The Average Price method recomputes the cost price as a receipt order has been processed, based on prices defined in tied purchase orders:
FORMULA (see here attached)
The average cost does not change when products leave the warehouse.
From an accounting point of view, this method is mainly justified in case of huge purchase price variations and is quite unusual due to its operational complexity. Your actually need a software like Odoo to easily keep this cost up-to-date.
This method is dedicated to advanced users. It requires well established business processes because the order in which you process receipt orders matters in the cost computation.

- In Continental memento: If the stock value decreased, he makes it upside down. -> If the stock value decreased, the "Inventory" account is credited and the "Inventory Variations" debited.

- Remove "[1] products leaving the stock have no impact on the average price." Now added to average price definition.

- At the botton, add links to following docs:
What is a removal strategy (FIFO, LIFO, FEFO, Specific Indentification): https://www.odoo.com/documentation/user/9.0/inventory/routes/strategies/removal.html
Impact on the average price valuation when returning goods: https://www.odoo.com/documentation/user/9.0/accounting/others/inventory/avg_price_valuation.html
How to integrate landed costs in the cost of the product? https://www.odoo.com/documentation/user/9.0/inventory/routes/costing/landed_costs.html
This commit is contained in:
Yannick Tivisse 2016-03-08 10:12:06 +01:00
parent 8babc0856e
commit 156e2123e2
6 changed files with 100 additions and 66 deletions
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6
accounting/others/inventory.rst
View File

@ -6,6 +6,6 @@ Inventory
:titlesonly:
inventory/avg_price_valuation
What is the impact of standard price, average price, FIFO and LIFO? <https://www.odoo.com/documentation/functional/valuation.html#costingmethod>
How is periodic inventory valuation working? <https://www.odoo.com/documentation/functional/valuation.html#periodicinventoryvaluation>
What is the impact of perpetual inventory valuation? <https://www.odoo.com/documentation/functional/valuation.html#perpetualinventoryvaluation>
../../../inventory/management/reporting/valuation_methods_continental
../../../inventory/management/reporting/valuation_methods_anglo_saxon

73
inventory/management/reporting/valuation_methods_anglo_saxon.rst
View File

@ -4,9 +4,6 @@
How to do an inventory valuation? (Anglo-Saxon Accounting)
==========================================================
Costing Method
==============
Every year your inventory valuation has to be recorded in your
balance sheet. This implies two main choices:
@ -16,6 +13,8 @@ balance sheet. This implies two main choices:
- the way you record the inventory value into your books
(periodic vs. Perpetual).
Costing Method
==============
.. rst-class:: alternatives doc-aside
Standard Price
@ -91,7 +90,7 @@ Average Price
- 12
- +4*€16
- €144
* - Deliver 10 Products [#average-removal]_
* - Deliver 10 Products
- €12
- 2
- | -10*€12
@ -103,18 +102,20 @@ Average Price
- +2*€6
- €36
The **Average Price** method recomputes the cost price as a
receipt order has been processed, based on prices defined in
tied purchase orders. This method is mainly justified in case
of huge purchase price variations and is quite unusual due to
its operational complexity. Your actually need a software like
Odoo to keep this cost up-to-date.
The **Average Price** method recomputes the cost price as a receipt order
has been processed, based on prices defined in tied purchase orders:
FORMULA (see here attached)
This method is dedicated to advanced users. It requires well
established business processes because the order in which you
process receipt orders matters in the cost computation. Moreover
if you mistakenly process such an order, there is no way to
reset the cost price at its initial value.
The average cost does not change when products leave the warehouse.
From an accounting point of view, this method is mainly justified in
case of huge purchase price variations and is quite unusual due to its
operational complexity. Your actually need a software like Odoo to
easily keep this cost up-to-date.
This method is dedicated to advanced users. It requires well established
business processes because the order in which you process receipt orders
matters in the cost computation.
FIFO
.. rst-class:: values-table
@ -156,19 +157,18 @@ FIFO
- +2*€6
- €44
For **Real Price** (FIFO, LIFO, FEFO, etc), the costing is
further refined by the removal strategy set on the warehouse
location or product's internal category. The default strategy
is FIFO. With such method, your inventory value is computed
from the real cost of your stored products (cfr. Quantitative
Valuation) and not from the cost price shown in the product
form. Whenever you ship items, the cost price is reset to the
cost of the last item(s) shipped. This cost price is used to
value any product not received from a purchase order (e.g.
inventory adjustments).
For **Real Price** (FIFO, LIFO, FEFO, etc), the costing is further
refined by the removal strategy set on the warehouse location
or product's internal category. The default strategy is FIFO. With
such method, your inventory value is computed from the real cost
of your stored products (cfr. Quantitative Valuation) and not from
the cost price shown in the product form. Whenever you ship items,
the cost price is reset to the cost of the last item(s) shipped.
This cost price is used to value any product not received from a
purchase order (e.g. inventory adjustments).
Such a method is advised if you manage all your workflow into
Odoo (Sales, Purchases, Inventory). It suits any kind of users.
FIFO is advised if you manage all your workflow into Odoo (Sales,
Purchases, Inventory). It suits any kind of users.
LIFO (not accepted in IFRS)
.. rst-class:: values-table
@ -210,6 +210,18 @@ LIFO (not accepted in IFRS)
- +2*€6
- €32
For **Real Price** (FIFO, LIFO, FEFO, etc), the costing is further
refined by the removal strategy set on the warehouse location
or product's internal category. The default strategy is FIFO.
With such method, your inventory value is computed from the
real cost of your stored products (cfr. Quantitative Valuation)
and not from the cost price shown in the product form. Whenever
you ship items, the cost price is reset to the cost of the last
item(s) shipped. This cost price is used to value any product
not received from a purchase order (e.g. inventory adjustments).
LIFO is not permitted outside the United States.
Odoo allows any method. The default one is **Standard Price**.
To change it, check **Use a 'Fixed', 'Real' or 'Average' price
costing method** in Purchase settings. Then set the costing
@ -319,8 +331,6 @@ Let's take the case of a reseller.
.. placeholder
.. [#average-removal] products leaving the stock have no impact on the average price.
.. raw:: html
<hr style="float: none; visibility: hidden; margin: 0;">
@ -349,3 +359,8 @@ Let's take the case of a reseller.
- Price Difference: to set in product's internal category or in product
form as a specific replacement value
.. seealso::
* :doc:`../../routes/strategies/removal`
* :doc:`../../../accounting/others/inventory/avg_price_valuation`
* :doc:`../../routes/costing/landed_costs`

78
inventory/management/reporting/valuation_methods_continental.rst
View File

@ -4,9 +4,6 @@
How to do an inventory valuation? (Continental Accounting)
==========================================================
Costing Method
==============
Every year your inventory valuation has to be recorded in your
balance sheet. This implies two main choices:
@ -16,6 +13,9 @@ balance sheet. This implies two main choices:
- the way you record the inventory value into your books
(periodic vs. Perpetual).
Costing Method
==============
.. rst-class:: alternatives doc-aside
Standard Price
@ -91,7 +91,7 @@ Average Price
- 12
- +4*€16
- €144
* - Deliver 10 Products [#average-removal]_
* - Deliver 10 Products
- €12
- 2
- | -10*€12
@ -103,18 +103,20 @@ Average Price
- +2*€6
- €36
The **Average Price** method recomputes the cost price as a
receipt order has been processed, based on prices defined in
tied purchase orders. This method is mainly justified in case
of huge purchase price variations and is quite unusual due to
its operational complexity. Your actually need a software like
Odoo to keep this cost up-to-date.
The **Average Price** method recomputes the cost price as a receipt order
has been processed, based on prices defined in tied purchase orders:
FORMULA (see here attached)
This method is dedicated to advanced users. It requires well
established business processes because the order in which you
process receipt orders matters in the cost computation. Moreover
if you mistakenly process such an order, there is no way to
reset the cost price at its initial value.
The average cost does not change when products leave the warehouse.
From an accounting point of view, this method is mainly justified in
case of huge purchase price variations and is quite unusual due to its
operational complexity. Your actually need a software like Odoo to
easily keep this cost up-to-date.
This method is dedicated to advanced users. It requires well established
business processes because the order in which you process receipt orders
matters in the cost computation.
FIFO
.. rst-class:: values-table
@ -156,19 +158,18 @@ FIFO
- +2*€6
- €44
For **Real Price** (FIFO, LIFO, FEFO, etc), the costing is
further refined by the removal strategy set on the warehouse
location or product's internal category. The default strategy
is FIFO. With such method, your inventory value is computed
from the real cost of your stored products (cfr. Quantitative
Valuation) and not from the cost price shown in the product
form. Whenever you ship items, the cost price is reset to the
cost of the last item(s) shipped. This cost price is used to
value any product not received from a purchase order (e.g.
inventory adjustments).
For **Real Price** (FIFO, LIFO, FEFO, etc), the costing is further
refined by the removal strategy set on the warehouse location
or product's internal category. The default strategy is FIFO. With
such method, your inventory value is computed from the real cost
of your stored products (cfr. Quantitative Valuation) and not from
the cost price shown in the product form. Whenever you ship items,
the cost price is reset to the cost of the last item(s) shipped.
This cost price is used to value any product not received from a
purchase order (e.g. inventory adjustments).
Such a method is advised if you manage all your workflow into
Odoo (Sales, Purchases, Inventory). It suits any kind of users.
FIFO is advised if you manage all your workflow into Odoo (Sales,
Purchases, Inventory). It suits any kind of users.
LIFO (not accepted in IFRS)
.. rst-class:: values-table
@ -210,6 +211,18 @@ LIFO (not accepted in IFRS)
- +2*€6
- €32
For **Real Price** (FIFO, LIFO, FEFO, etc), the costing is further
refined by the removal strategy set on the warehouse location
or product's internal category. The default strategy is FIFO.
With such method, your inventory value is computed from the
real cost of your stored products (cfr. Quantitative Valuation)
and not from the cost price shown in the product form. Whenever
you ship items, the cost price is reset to the cost of the last
item(s) shipped. This cost price is used to value any product
not received from a purchase order (e.g. inventory adjustments).
LIFO is not permitted outside the United States.
Odoo allows any method. The default one is **Standard Price**.
To change it, check **Use a 'Fixed', 'Real' or 'Average' price
costing method** in Purchase settings. Then set the costing
@ -295,7 +308,8 @@ Profit&Loss section to your assets.
Expenses: Inventory Variations X
===================================== ===== ======
If the stock value decreased, he makes it upside down.
If the stock value decreased, the **Inventory** account is credited
and te **Inventory Variations** debited.
.. raw:: html
@ -317,8 +331,6 @@ Let's take the case of a reseller.
.. placeholder
.. [#average-removal] products leaving the stock have no impact on the average price.
.. raw:: html
<hr style="float: none; visibility: hidden; margin: 0;">
@ -338,3 +350,9 @@ Let's take the case of a reseller.
category
- Inventory: to set as Stock Valuation Account in product's internal category
.. seealso::
* :doc:`../../routes/strategies/removal`
* :doc:`../../../accounting/others/inventory/avg_price_valuation`
* :doc:`../../routes/costing/landed_costs`

1
inventory/routes/costing.rst
View File

@ -5,5 +5,4 @@ Product Costing
.. toctree::
:titlesonly:
What costing method should you use? (standard, average, fifo) <https://www.odoo.com/documentation/functional/valuation.html#costingmethod>
costing/landed_costs

3
inventory/routes/costing/fifo_lifo.rst
View File

@ -1,3 +0,0 @@
==========================================================
How to setup a perpetual FIFO or LIFO inventory valuation?
==========================================================

5
inventory/routes/strategies/removal.rst
View File

@ -161,3 +161,8 @@ removal dates.
.. image:: media/removal11.png
:align: center
.. seealso::
* :doc:`../../management/reporting/valuation_methods_continental`
* :doc:`../../management/reporting/valuation_methods_anglo_saxon`