Many Sage 50 users are confused as to how the Closing stock Value obtained as per Stock Valuation Reports available in sage 50 .(Products/Product Valuation Reports) There are basically 2 reports available with sometimes 2 different Valuations shown. One Report shows the value using the FIFO method and the other one using the Last Purchase Cost. Last Purchase Cost method is not a valuation accepted under Accounting Standards, yet useful in verifying whether "Net Realisable value" of stocks is below than "Cost" (FIFO report) as per the Standard.
The FIFO method report shows Total stock value as per FIFO (Assuming First came went First Out) method divided by balance Quantity available and thus a average Cost per Item column is shown. This makes it is confusing to many users whether this is the "Average" method. which is not so.
If Minus Quanity is allowed in the system Option available) then there couls be serious variations and value of FIFO report could be widely fluctuating
Difference in value according to these 2 reports is completely acceptable if prices are fluctuating.Yet the biggest issue is sometimes certain Items available as per one report is not shown in the other report and vice versa thus total quantity also may very on 2 reports.
This happens when items with very low cost (Less than 0.01 Cents per Item) as per FIFO report are available, but the last cost could be higher. Such items may not appear in FIFO report but could appear on Last Purchase Cost Report creating a quntity (and also a value) Difference.
The FIFO method report shows Total stock value as per FIFO (Assuming First came went First Out) method divided by balance Quantity available and thus a average Cost per Item column is shown. This makes it is confusing to many users whether this is the "Average" method. which is not so.
If Minus Quanity is allowed in the system Option available) then there couls be serious variations and value of FIFO report could be widely fluctuating
Difference in value according to these 2 reports is completely acceptable if prices are fluctuating.Yet the biggest issue is sometimes certain Items available as per one report is not shown in the other report and vice versa thus total quantity also may very on 2 reports.
This happens when items with very low cost (Less than 0.01 Cents per Item) as per FIFO report are available, but the last cost could be higher. Such items may not appear in FIFO report but could appear on Last Purchase Cost Report creating a quntity (and also a value) Difference.
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