Using Average Cost Inventory Valuation Methods
In AcuityLogic Admin, you can select one of the following inventory valuation methods to determine how the inventory value for your company is assessed and reported:
- Standard Cost: (Default method) Values inventory based on one cost assigned to an item and the quantity of that item in stock.
- Average Cost by Company: (Generally Accepted Accounting Principles (GAAP) Weighted Average Cost method) Assesses the inventory for an entire company based on the original costs of all items in stock plus the inventory transactions that affect average cost, which occur after acquisition.
- Average Cost by Office: (GAAP Weighted Average Cost method) Assesses the inventory for each office in a company based on the original costs of all items in each office plus the inventory transactions that affect average cost, which occur after acquisition.
In AcuityLogic Admin, the inventory valuation method can be updated only if no inventory transactions have been recorded for the current day. When the inventory valuation method is updated to average cost by company or average cost by office, the current standard cost for each item is automatically set as the initial average cost for that item.
This section provides information about using the two average cost inventory valuation methods in AcuityLogic.
Topics include the following:
- Understanding Inventory Valuation and Item Cost
- Calculating Average Cost
- Understanding Average Cost Benefits
- Using AcuityLogic BackOffice Reports for Inventory Valuation
- Comparing Average Cost Valuation Methods
- Understanding Inventory In Transit and Inventory Valuation
- Understanding Work In Progress and Inventory Valuation