[ARCHIVED] Inventory Valuation | Odoo Accounting

[@syedishaq796]

So the accounting method was anglo saxon? as the valuation was impacted after the product leave the inventory?

[@kato6291]

hello! what happen if i change from fifo to avco? i already have stock movements. thanks.

[@Odoo]

When you switch from FIFO to AVCO, journal entries will be created and the expense account selected on the product category will be hit. To correct this, you need to switch the expense account to "Stock Interim Received" before changing your costing method to AVCO, then after the switch, switch it back. That way the 2 journal entries created are - Inventory + Stock Interim Received + Inventory - Stock Interim Received PLEASE NOTE: This is NOT a simple change and we strongly recommend seeking the assistance of our experts for this, as if any issue should appear during the switch or occur from the switch, it may severely impact your workflow. You can get consulting advice here: www.odoo.com/pricing-packs.

[@aqqqq5357]

There is a specific question that will be clarified with an example: I use the average cost accounting method in Odoo. I have a product called "Mobile Phone." I bought 1 piece for 100 Riyals. Currently, the general cost of the product is 100 Riyals. If I buy another piece of the Mobile Phone for, let's say, 200 Riyals. Currently, the average cost of the product is 150 Riyals. So far, there is no problem. The problem arises if I buy a piece for 100 Riyals and then sell it (with a cost entry of 100 Riyals). Now, if I buy another piece for 200 Riyals, What will Odoo do in this case? Will it calculate the general cost as 150 Riyals, considering the quantity of the sold products, or will it set the cost as 200 Riyals because there is no second quantity to average the cost with? I believe that the correct approach is for Odoo to set the cost as 200 Riyals because the actual total cost for all quantities is 300 Riyals. I sold a product at a cost of 100 Riyals, and the cost of the second product is 200 Riyals. Please clarify whether Odoo follows the first or the second approach. Odoo version: 14 Community Edition.

[@anasstawqi4214]

it is clear but why standered method the Inventory Valuation remain 10 i thought it will be 20

[@Odoo]

For the standard inventory valuation, each unit will always be worth €10 in the inventory, regardless of what we actually paid for them. After buying the first unit for €10, the valuation for Product 1 is €10 (as shown at 3:55). After buying the second unit for €20, the valuation for Product 1 is now €20 (2 units at €10 each as shown at 4:45). After selling one of the two units, the valuation for Product 1 is €10 again (as shown at 5:50). An easy way to think about it for standard inventory valuation is that the valuation will always equal (quantity) * (cost set on product record), in this case, 1 * €10.

[@mohamedelnwehy2984]

Great