What is LIFO/FIFO valuation level in SAP MM-IV - Invoice Verification?

SAP Term: LIFO/FIFO valuation level

• Component: MM-IV

• Component Name: Invoice Verification

• Description: The degree to which valuation is perfomed. LIFO or FIFO valuation can be performed at the following levels: Company code, the stocks of all valuation areas of the company codes are valuated together for each material. Valuation area, the stocks in different valuation areas below the company code level are valuated for each material.

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• Key Concepts: 
  LIFO/FIFO valuation level is a component of SAP's Materials Management (MM) Invoice Verification module. It is used to determine the value of goods that are received from vendors and stored in inventory. The two methods of valuation are Last In First Out (LIFO) and First In First Out (FIFO). LIFO assumes that the last goods received are the first ones used, while FIFO assumes that the first goods received are the first ones used. 
  
  How to use it: 
  The LIFO/FIFO valuation level is set up in the SAP system by entering a value in the “Valuation Level” field in the MM-IV Invoice Verification module. This value can be either “LIFO” or “FIFO”. Once this value is set, it will be used to determine the value of goods received from vendors and stored in inventory. 
  
  Tips & Tricks: 
  It is important to note that the LIFO/FIFO valuation level should be set up before any goods are received from vendors. This will ensure that all goods received are valued correctly according to the chosen method. 
  
  Related Information: 
  For more information on setting up the LIFO/FIFO valuation level in SAP, please refer to SAP Help documentation or contact your local SAP support team.