Inventory valuation is the cost associated with an entity's at the end of a reporting period. In odoo 13 we can easily valuate the inventory.

1. FIFO Inventory Valuation in Odoo 13

2. Inventory valuation is the cost associated with an entity's at the end of
a reporting period.This valuation appears as a current asset on the
entity's balance sheet.The inventory valuation is based on the costs
incurred by the entity to acquire the inventory, convert it into a
condition that makes it ready for sale, and have it transported into the
proper place for sale.In odoo 13 we can easily valuate the inventory.
The inventory valuation is depended on the way you compute the cost
of your stored items.Here we can valuate inventory under FIFO(First In
First Out).It actually updates the cost price of the product according to
the last outgoing product in inventory. So the removal strategy like
FIFO has a major role in this costing method.The cost price of the
product doesn't changes until a product is removed from inventory by
any of the removal strategies. That's why the process is real time and
which is accepted widely.

3. First we want to create a product category by FIFO methode.
Inventory->Configuration->Product Categories->

4. Select the Create-> button to create a new category.

5. ● Enter the Category Name
● Selet the Parent Category
● Select Costing methode and Force Removal Strategy as FIFO
Then Save-> the form.
Then go to the Products page.
Master Data->Products->

7. Click the Create-> button to create a new product.

8. ● Enter the Product Name
● Select the Product Category
● Enter the Sales Price
Here the cost price is 0rs and 0 product in hand. So let's do the
two purchase with the unit price 800rs for 10 products and 900rs
for the 5 products respectively.
Purchase->Orders->RfQ->

9. Create-> a new order.

10. ● Select the Vendor
● Select the Product
● Enter the quantity and Unit price as 10 and 800rs.
Then Save-> the rfq and click Confirm Order-> .

11. Select the Recieve Products-> button to recieve the products.

12. Change the done values from 0 to 10 and Validate-> the form.

13. Create the second RfQ and recieve the product by the same method.
Here the quantity is 5 units and the price is 900rs/unit.

14. After purchasing the 10+5 quantities go to the product details to
check the on hand quantities.
Here we can see we have 15 units are available in on hand but the
cost price is not changed.

15. The cost price only change only when we sale the product.
Sales->Orders->Sales Orders->
Click the Create-> button to create a new order.

16. ● Select the Customer
● Add the product and enter the quantity.
Here 12 quantities are selected for sale.
Select the Confirm-> button to confirm the sale.

17. Go to the Delivery-> for the product’s delivery.

18. Change the Done quantities from 0 to 12 and Validate-> the
delivery form.

19. Go to the product’s page,
Here we can see,there are 3 quantities in on hand,12 units sold
and the Cost changes from 0 ro 900rs.

20. Go to the Inventory Valuation for valuating the inventory.
Inventory->Configuration->Inventory Valuation->

21. We can see the product’s purchases and sales in here with total
value.
First we purchased 10 units at 800 rs : 10*800=8000
Then purchased 5 units at 900 rs : 5*900=9000
Delivered 12 quantities: (10*800)+(2*900)=9800
So we can see the product sale is under the FIFO method.And the
cost of the product changes to 900 rs because there are 3 units are
in on hand so its cost is 900 rs.

22. ●Must Watch:
●https://www.youtube.com/watch?v=rbo-CbJ9Rhc&t=

23. Thank You
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