Difference between revisions of "Costing Methodologies"
(→Retail Method) |
|||
| Line 6: | Line 6: | ||
==Standard Costing == | ==Standard Costing == | ||
| + | |||
== FIFO == | == FIFO == | ||
| Line 15: | Line 16: | ||
== Last Invoice== | == Last Invoice== | ||
== Average Invoice == | == Average Invoice == | ||
| + | One major issue in average invoice costing is correcting the costs, if the product has been sold before receiving the invoice. Adempiere does not retroactively adjust the costs used in the receipt and sales transaction, but adjusts the actual cost price for future use. | ||
| + | |||
== Last PO == | == Last PO == | ||
== Average PO == | == Average PO == | ||
| + | One major issue in average PO costing is Adempiere does not allow the receipt posting if it is not matched to any PO, thus PO is a mandatory document. See: [[Merging Average PO & Average Invoice Cost Methodology]] | ||
== Retail Method == | == Retail Method == | ||
Revision as of 19:02, 26 July 2007
Contents
Costing Methodologies
This page discusses various costing methodologies applicable to accounting schemas in Adempiere
Standard Costing
FIFO
LIFO
Last In First Out is prohibited from use under IAS2.IN13
It is recognised in IAS2.BC20 that in some jurisdictions, use of the LIFO method for tax purposes is allowed only if that method is also used for accounting purposes.However, the IASB concluded that tax considerations do not provide an adequate conceptual basis for selecting an appropriate accounting treatment and that it is not acceptable to allow an inferior accounting treatment purely because of tax regulations and advantages in particular jurisdictions. This may be an issue for local taxation authorities.
Last Invoice
Average Invoice
One major issue in average invoice costing is correcting the costs, if the product has been sold before receiving the invoice. Adempiere does not retroactively adjust the costs used in the receipt and sales transaction, but adjusts the actual cost price for future use.
Last PO
Average PO
One major issue in average PO costing is Adempiere does not allow the receipt posting if it is not matched to any PO, thus PO is a mandatory document. See: Merging Average PO & Average Invoice Cost Methodology
Retail Method
(NOT IMPLEMENTED IN ADEMPIERE)
The retail method is a costing methodology often employed in the retail industry to measure large numbers of rapidly changing items with similar margins for which it is impractical to use other costing methods.
The cost of the inventory is determined by reducing the sales value of the inventory by the appropriate gross margin percentage. The percentage must include inventory that has been marked down below its original selling price. An average percentage per department is often used.
