When to use FIFO?
WHEN TO USE THE METHOD FIFO ? The method FIFO is usually used for stock management of perishable products, with expiry date, in particular food, medicines or cosmetics.
How to count the work in progress? As soon as a company begins its activity, at each closing date, it will be necessary for it to determine the value of its stocks of goods or work in progress. It is this value which will be carried forward in the balance sheet at the end of the period and which will have an impact on its results.
The valuation of stocks is therefore the calculation of the enhanced value of its stocks. How to proceed to the valuation of stocks? To carry out the valuation of its stocks, it is necessary to inventory them by means of an inventory, a legal obligation which must be carried out at least once a year.
There are two methods of inventory valuation, input valuation and output valuation. Goods receipts are made at acquisition cost. Outputs are valued using four valuation methods. The valuation of outputs for the calculation of the cost of return…
The valuation of inventories by the replacement value method can be compared to speculation. Indeed, to determine the values of a stock, the company will base itself on: Also in the section:
The valuation of interchangeable stocks with the CUMP method. The weighted average unit cost (WUC) method consists of calculating a weighted average cost by dividing the total acquisition costs by the total quantities acquired.