Inventory valuation refers to how you value your stock. It’s a very important aspect of a business as inventory can be the biggest asset of a company. An inventory valuation of a company helps to know the monetary value for items in their inventory. To ensure reliable financial records on inventory reports, careful calculation of them is important. The main aim of inventory valuation is to find the revenue. After deducting the expense of product sold from sales, gross profit is determined. Purchases plus opening stock minus closing stock are the cost of products delivered. The accurate value of the inventory measures the current assets, cash flow, shareholders' or owners' equity reported on the balance sheet.

1. Inventory
Valuation Odoo 15
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2. INTRODUCTION
❖ Inventory valuation refers to how you value your stock. It’s a very important aspect of a
business as inventory can be the biggest asset of a company.
❖ An inventory valuation of a company helps to know the monetary value for items in their
inventory. To ensure reliable financial records on inventory reports, careful calculation of
them is important.
❖ The main aim of inventory valuation is to find the revenue. After deducting the expense of
product sold from sales, gross profit is determined.
❖ Purchases plus opening stock minus closing stock are the cost of products delivered. The
accurate value of the inventory measures the current assets, cash flow, shareholders' or
owners' equity reported on the balance sheet.

3. ❖ Inventory valuation is depend upon your accounting mode.
❖ For that goto Accounting > Configuration > Settings

4. ❖ By enabling developer mode, we will able to see Anglo Saxon accounting option.By disabling
this option the accounting mode will considered as continental.
❖ In anglo saxon accounting the cost of goods only recorded as an expenses only after invoicing
of goods but in the case of continental accounting the cost of the product recorded as expenses
after affecting the stock.

5. ❖ After that Go to Customers > Products.

6.  Choose one product and go to it’s product category

7. ❖ Here we will have following costing methods :-
○ Standard Price -
The inventory valuation will not consider the amount for which you bought this item. It
directly takes the cost price you provided on product

8.  First In First Out -
■ Cost of goods sold will be updated with the cost of item come to the stock at
first.ost of goods sold will be updated with the cost of item come to the stock at
first.This method is the recommended method.
 Average Cost -
■ In average costing method, cost of items in inventory is calculated based on the
average cost of all available similar items in inventory.i.e cost of an item in inventory
divided by the number of items available in stock.
■ FIFO
■ In real time inventory valuation method, Odoo keeps the track of the cost of each
incoming and outgoing items. Real-time costing method works along with stock
removal strategy.

9. ❖ Now select a product category and set costing method as Standard price and inventory
valuation as Manual. Then SAVE.

10. ❖ Now goto Purchase module > purchase order

11. ❖ Create one PO and add your product then CONFIRM.

12. ❖ Receive your products and VALIDATE the transfer created.

13. ❖ Under Accounting menu go to Journal Items.

14. ❖ We can not find any entry for this transfer.So there for we have to manually create journal
entry.

15. ❖ Change Inventory valuation as automated and the specify the account stock properties and
income and expense account.

16. ❖ Under Accounting menu go to Journal Items.

17. ❖ Receive your products and VALIDATE the transfer created.

18. ❖ From journal entries we will get entry created.

19. ❖ After clicking record we will get the details of the journal entry.

20. For More
Details
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Inventory Valuation Odoo 15

22. Thank You