In Microsoft Dynamics GP you have a few options for valuation methods for inventory costing:
- FIFO Perpetual
- LIFO Perpetual
- Average Perpetual
- FIFO Periodic
- LIFO Periodic
The concepts of these methods are familiar to most if not all accountants, but the way GP handles this process may not be. My goal isn’t to teach the accounting principle here just how the system handles them, so if you are unfamiliar with FIFO, LIFO and Average grab an accounting book and read up. In this post I’ll briefly touch on the periodic methods but I really wanted to tell how FIFO an LIFO Perpetual are handled in the system. First let’s get Periodic out of the way. On the Item Maintenance window in GP there is a Standard Cost and a Current Cost field. For Periodic methods, the value in Standard Cost at the time the invetory was purchased will be the value inventory is costed at. Periodic disregards how much it actually costs and uses the Standard Cost.
As for Perpetual, that uses the actual cost of the inventory when it was purchased. Each time you purchase it updates the Current Cost field on the Item Maintenance window with the most recent cost. So the Current Cost is a good gauge of what inventory is currently going for, but not necessarily what the cost will be the next time you sell it. So where do we find that information? There is a layer table in SQL that keeps track of your inventory layers so when you sell items it sells from the oldest layer (when using FIFO) or newest layer (when using LIFO). Whoa sorry, I almost went into the accounting principle there, let’s pull back. The table that keeps track of layers is IV10200 and this table shows each item that was purchased, the site, date received, qty received, the qty that has been sold so far from that layer, and the unit cost. That is where you can see what value your inventory currently holds. I won’t go into detail here but the IV10201 is a good table to check out too.
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